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The top corporation has ending inventory of $701,073, and cost of goods sold for the year just ended was $7,461,613. What financial insights can be derived from this information?

User Fjarri
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Final answer:

The financial insight derived from this information is the calculation of the inventory turnover ratio, which measures how quickly a company sells its inventory.

Step-by-step explanation:

The financial insight that can be derived from this information is the calculation of the inventory turnover ratio. The inventory turnover ratio measures how quickly a company sells its inventory during a period. It is calculated by dividing the cost of goods sold by the average inventory.

In this case, the cost of goods sold is $7,461,613 and the ending inventory is $701,073. To calculate the average inventory, we can use the following formula:

Average Inventory = (Beginning Inventory + Ending Inventory) / 2.

By substituting the given values, we get:

Average Inventory = (unknown + $701,073) / 2.

To solve for the unknown, we need additional information, such as the beginning inventory.

User BUKTOP
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