Question

Waters Department Store had net credit ales of $16mil and cost of goods sold of $12mil for the year. The average inventory for the year amounted to $2mil. inventory turnover for the year is

Answer 1

6 million is the inventory turnover

Step-by-step explanation:

The formula to calculate inventory turnover =
`(Cost of goods sold)/(Average Inventory)`

Here we are provided,

Cost of goods sold = $12 million

Average Inventory = $2 million

Or it is calculated by using the formula

Here, we are not provided with total sales, therefore, this formula cannot be used.

Using the former formula we have,

`(12 million)/(2 million)` = 6 million.

Final Answer

6 million is the inventory turnover