Your firm has sales of $879,000 and cost of goods sold of $568,000. At the beginning of the year, your inventory was $38,000. At the end of the year, the inventory balance was $43,000. What is the inventory turnover rate?

Question

Quizplus · Accepted Answer

The inventory turnover rate is calculated as Cost of Goods Sold divided by the average inventory. Average inventory is ($38,000 + $43,000) / 2 = $40,500. Inventory turnover rate = $568,000 / $40,500 = 14.02 times.

Your Firm Has Sales of $879,000 and Cost of Goods