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ali baba manufacturing held an average inventory of $932000 (raw materials, work-in-process, finished goods) last year. its sales were $7000000, and its cost of goods sold was $4060000. the firm operates 350 days a year. how many inventory turns did ali baba have during the year?

1 Answer

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Final answer:

Ali Baba Manufacturing turned over its inventory approximately 4.36 times during the year, calculated by dividing the cost of goods sold ($4,060,000) by the average inventory ($932,000).

Step-by-step explanation:

To calculate the number of inventory turns that Ali Baba Manufacturing had during the year, we can use the formula:

Inventory Turns = Cost of Goods Sold / Average Inventory

Given that the company's cost of goods sold was $4,060,000 and the average inventory was $932,000, we can calculate the inventory turns as follows:

Inventory Turns = $4,060,000 / $932,000 ≈ 4.36

This means that Ali Baba Manufacturing turned over its inventory approximately 4.36 times during the year.

User Chris Kannon
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