Question

The grocery industry has an annual inventory turnover of about times. Organic​ Grocers, Inc., had a cost of goods sold last year of ​$​; its average inventory was ​$. What was Organic​ Grocers' inventory​ turnover, and how does that performance compare with that of the​ industry? ​a) What was Organic​ Grocers' inventory​ turnover? nothing times per year ​(round your response to two decimal​ places). ​b) How does Organic​ Grocers' performance compare with that of the​ industry? It is ▼ the same as worse than better than the industry.

Answer 1

Inventory turnover ratio= 10.5 times

Organic​ Grocers' performance is LOW compare with that of the grocery industry.

Step-by-step explanation:

Computation of Inventory turnover ratio using this formula

Inventory turnover ratio = Cost of goods sold / Average inventory

Let plug in the formula

Inventory turnover ratio = $10.5 /$ 1 .00

Inventory turnover ratio= 10.5 times

Therefore Organic Grocers’s inventory turnover is 10.5 times

Based on the information given about grocery industry we were told that they had annual inventory turnover of 14 times while Organic Grocers’s based on the above calculation inventory turnover is 10.5 times which means that Organic Grocers’s performance is low when compared with grocery industry which had inventory turnover of about 14 times.

Therefore Organic​ Grocers' performance is LOW compare with that of the grocery industry.