Question

Given these facts, compute inventory turnover:

Total assets $10,000,000
Cost of goods sold 2,200,000
Average inventory 1,300,000
Interest expense 850,000
-0.59.
-1.69.
-2.59.
-7.69.
-Not enough information is given.

Answer 1

Inventory turnover is a financial ratio that measures the number of times a company's inventory is sold and replaced during a specific period. It is calculated by dividing the cost of goods sold by the average inventory.

Step-by-step explanation:

Inventory turnover is a financial ratio that measures the number of times a company's inventory is sold and replaced during a specific period. It is calculated by dividing the cost of goods sold by the average inventory. In this case, the cost of goods sold is $2,200,000 and the average inventory is $1,300,000. Therefore, the inventory turnover can be calculated as:

Inventory turnover = Cost of goods sold / Average inventory

Inventory turnover = $2,200,000 / $1,300,000

Inventory turnover = 1.69