Selected information for 2018 is: cost of goods sold, $6,000,000 average inventory, $2,000,000...
Question:
Selected information for 2018 is:
cost of goods sold, $6,000,000
average inventory, $2,000,000
net sales, $8,000,000
average receivables, $980,000
net income, $700,000.
Assuming a 360-day year, what was the inventory turnover ratio for 2018?
Inventory turnover ratio:
Inventory turnover ratio reveals the information that in how many days the inventory of an organization is converted into sales. Company having lower inventory turnover ratio have lower sales while company having high turnover ratio will have higher sales.
Answer and Explanation:
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What Is Inventory Turnover? - Definition, Formula & Calculation
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Chapter 6 / Lesson 13
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Inventory turnover is the ratio of how much a company has sold its products and replaced its supply during a specific period of time. Learn more about the definition of inventory turnover, formulas used for computing it, and the calculation steps for determining it.
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