Question

​Elephant, Inc.'s cost of goods sold for the year is​ $2,000,000, and the average merchandise inventory for the year is​ $129,000. Calculate the inventory turnover ratio of the company.​ (Round your answer to two decimal​ places.)

Answer 1

Inventory TurnOver = 15.50

Step-by-step explanation:

`(net \: sales)/(average \: Inventory) = Inventory \: TurnOver`

Where:

`average \: Inventory = (beginning \: Inventory+ ending \: Inventory) / 2`

In this case we are given with the average inventory so we can pass directly to calculate the turnover

2,000,000/129.000 = 15.50387597