Marks Inc.an online retail store,recorded an inventory of $3,000 as of December 31,2012.Its inventory stood at $3,500 on December 31,2013.The cost of goods sold for the corresponding year was $15,000.Which of the following indicates the inventory turnover ratio of Marks Inc.?
A)5
B)4.28
C)4.61
D)5.22

Question

Quizplus · Accepted Answer

The inventory turnover ratio is calculated as Cost of Goods Sold divided by the average inventory. The average inventory is ($3,000 + $3,500) / 2 = $3,250. Therefore, the inventory turnover ratio is $15,000 / $3,250 = 4.61.

Marks Incan Online Retail Store,recorded an Inventory of $3,000 as of of December