Question

Adriane's Grocery Store had a beginning inventory of $14,000 and an ending inventory of $19,000.

Net sales during the year amounted to $78,000 and gross profit was $12,000. The inventory
turnover ratio was:
(Please enter a round number without decimal places.)

Answer 1

5

Step-by-step explanation:

The inventory turnover ratio shows how many times inventory was sold during a year.

The formula for calculating turnover ration is as below.

Inventory turn over ratio = cost of goods sold/ average inventory

average inventory is opening stock + closing stock/2

In this case, average inventory = $14,000 + $19,000/2

Average inventory = $33,000/2=$16,500

The cost of goods sold is not provided, so we use net sales.

Inventory turnover = $78,000/$16,500= 4.7

As round number inventory turnover = 5