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3 February, 00:09

Use the following information:Net sales $ 240,000Cost of goods sold 172,000Beginning inventory 53,000Ending inventory 43,000Calculate the inventory turnover ratio.

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  1. 3 February, 01:29
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    The inventory turnover ratio is 3.58 times

    Explanation:

    Inventory turnover ratio an efficiency ratio that indicates how many times a company sells and replaces its stock of goods during a particular period

    Inventory turnover ratio is calculated by using following formula:

    Inventory turnover ratio = Cost of Goods Sold/Average Inventory

    In there:

    Average Inventory = (Beginning inventory + Ending inventory) / 2

    In the company:

    Average Inventory = ($53,000 + $43,000) / 2 = $48,000

    Inventory turnover = $172,000/$48,000 = 3.58 times
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