Question

Cool Lope Shaved Ice, Inc.'s cost of goods sold for the year is $1,900,000, and the average merchandise inventory for the year is $132,000. Calculate the inventory turnover ratio of the company. (Round your answer to two decimal places.)

Answer 1

Answer:

Inventory turnover ratio = 14.39(Approx)

Explanation:

Given:

Goods sold for the year = $1,900,000

Average merchandise inventory for the year = $132,000

Inventory turnover ratio = ?

Computation of inventory turnover ratio:

Inventory turnover ratio = Goods sold for the year / Average merchandise inventory for the year

Inventory turnover ratio = $1,900,000 / $132,000

Inventory turnover ratio = 14.3939394

Inventory turnover ratio = 14.39 (Approx)