Net sales $410,660 Cost of goods sold (purchased items) $102,500 Net income after taxes $ 45,415 Current assets $299,665 Current liabilities $276,230 Avg. inventory value $ 91,620 Find out the inventory turnover from the information provided above. Group of answer choices 1.1 0.3 1.6 0.9 Do not have enough information to compute

Question

Business

Kai Weiss

30 April, 13:08

Net sales $410,660 Cost of goods sold (purchased items) $102,500 Net income after taxes $ 45,415 Current assets $299,665 Current liabilities $276,230 Avg. inventory value $ 91,620 Find out the inventory turnover from the information provided above. Group of answer choices 1.1 0.3 1.6 0.9 Do not have enough information to compute

+5

Answers (1)

Know the Answer?

Sarai Dunn · Answer 1

1.1 times

Explanation:

The formula to compute the inventory turnover ratio is shown below:

Inventory turnover ratio = Cost of goods sold : average inventory

= $102,500 : $91,620

= 1.12 times

Since the average inventory is given so there is no need to find out. We simply apply the formula which is presented above.

Moreover, it shows a relationship between the cost of goods sold and the average inventory