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Winnipeg Washing Machines reported net credit sales of $12,000,000 and cost of goods sold of $9,000,000 for the year.The average inventory for the year was $2,000,000.
-The inventory turnover ratio for the year was
A)4.5 times.
B)5.3 times.
C)6.0 times.
D)22.0 times.

Question

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Winnipeg Washing Machines reported net credit sales of $12,000,000 and cost of goods sold of $9,000,000 for the year.The average inventory for the year was $2,000,000.
-The inventory turnover ratio for the year was
A)4.5 times.
B)5.3 times.
C)6.0 times.
D)22.0 times.

Quizplus · Accepted Answer

The inventory turnover ratio is calculated as Cost of Goods Sold divided by Average Inventory. So, $9,000,000 / $2,000,000 = 4.5 times.

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