Question

The following information was available for the year ended December 31, 2013: Net sales $ 803,000 Average accounts receivable for the year $ 38,700 Cost of goods sold 598,600 Accounts receivable at year-end 30,800 Average inventories for the year 162,000 Inventories at year-end 157,450 Required: a. Calculate the inventory turnover for 2013. (Round your answer to 2 decimal places.)

Answer 1

Answer: 3.70

Explanation: Stock turnover can be calculated using following formula :-

`stock\:turnover\:ratio=(cost\:of\:goods\:sold)/(average\:stock)`

where,

cost of goods sold =598,600

average stock = 162,000

now, putting the values into equation above, we get :-

`stock\:turnover\:ratio=(598,600)/(162,000)`

= 3.70