Question

AD corporation had sales of $750,000 and costs of goods sold of $350,000. Inventory at year end was $87,500. What is the inventory turnover?

Answer 1

4 times

Step-by-step explanation:

The inventory turnover ratio of the AD corporation can be calculated using the below mentioned formula:

Inventory turnover=Costs of goods sold/Average inventory

In given question

Costs of goods sold=$350,000

Assuming, inventory at year end= Average inventory=$87,500

Inventory turnover=$350,000/$87,500=4 times