Question

Last year, a Walmart store in Nebraska had annual sales of $11,390,000, with an average dollar stock amount for the year of $2,149,000. What was the stock turnover for the year at the store in Nebraska? How would the store manager determine if this was a "good" rate of turnover?

Answer 1

See below

Step-by-step explanation:

1. With regards to the information above, stock turnover is computed as cost of goods sold divided by average stock.

Stock turnover = Cost of goods sold / Average stock

Cost of goods sold/Cost of sales = $11,390,000

Average stock = $2,149,000

Then,

Stock turnover = $11,390,000 / $2,149,000

Stock turnover = 5.30 times

Therefore, the stock turnover for the year at the store in Nebraska is 5.30 times

2. The store manager would determine if it was a good rate of turnover if it increases compare to previous stock turnover. Rate of turnover shows the rate or number of times at which a company can sell and replace its stock of goods within a year.