Ask Question
29 March, 13:27

For the current year, Theta Corporation has beginning and ending inventories of $40,000 and $60,000, respectively. Cost of goods sold for the year is $240,000. What is the company's inventory turnover ratio?

+4
Answers (1)
  1. 29 March, 14:19
    0
    Inventory turnover ratio = 4.8

    Explanation:

    Giving the following information:

    Theta Corporation has beginning and ending inventories of $40,000 and $60,000, respectively. The cost of goods sold for the year is $240,000.

    The inventory turnover is the number of times the inventory gets replaced in a period.

    The formula to calculate the inventory turnover ratio, we need to use the following formula:

    Inventory turnover ratio = cost of goods sold / average inventory

    Average inventory = (beginning inventory + ending inventory) / 2

    Average inventory = (40,000 + 60,000) / 2 = 50,000

    Inventory turnover ratio = 240,000/50,000 = 4.8
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “For the current year, Theta Corporation has beginning and ending inventories of $40,000 and $60,000, respectively. Cost of goods sold for ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers