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29 May, 23:14

Bosh Heat Incorporated has a gross profit margin of 23.00%. It has sales of $792,590.00, and a current inventory level of $293,110.00. What is its inventory turnover ratio?

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  1. 29 May, 23:48
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    2.08 times

    Explanation:

    The computation of the inventory turnover ratio is shown below:

    Inventory turnover ratio would be

    = Cost of goods sold : average inventory

    where,

    Cost of goods sold = Sales * cost of goods sold percentage

    = $792,590 * 77%

    = $610,294.30

    As we know that

    Cost of goods sold = Sales - gross profit

    = 100 - 0.23

    = 0.77

    We assume the sales to be 100

    So, the ratio would be

    = $610,294.30 : $293,110

    = 2.08 times
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