Question

The grocery industry has an annual inventory turnover of about 13 times. Organic​ Grocers, Inc., had a cost of goods sold last year of ​$11 comma 680 comma 000​; its average inventory was ​$1 comma 008 comma 880. What was Organic​ Grocers' inventory​ turnover, and how does that performance compare with that of the​ industry? ​a) What was Organic​ Grocers' inventory​ turnover

Answer 1

What was Organic​ Grocers' inventory​ turnover

ORGANIC

11,58 INVENTORY TURNOVER

Step-by-step explanation:

The Organic company compared with the industry works with more inventory than the market, which means that the company is less efficient than the Grocery Industry in Inventory management .

ORGANIC

11,58 INVENTORY TURNOVER

11.680,000 Cost Of Goods

1.008,880 Average Inventory

32 DAYS IN INVENTORY

To calculate the Inventory Turnover ratio it's necessary to calculate the average inventory of the year ($1,008,880) , take the Total Cost of Goods ($11,680,000) and divide it by the Average Inventory, the result it's the Inventory Turnover of the company, in this case 11,58

To find the days in inventory we have to divide 365 (days of the year) by the Inventory Turnover, 11,58 the result is 32 days.

To have a similar Inventory Turnover as the industry the company needs to low the average inventory to $898,524.

ORGANIC

13,00 INVENTORY TURNOVER

11.680,000 Cost Of Goods

898,524 Average Inventory

28 DAYS IN INVENTORY