Bill's Bolo business has a cost of goods sold of $45,000, an inventory of $20,000, and current assets of $50,000. Which of the following is the inventory turnover for the business?

Question

Quizplus · Accepted Answer

The inventory turnover is calculated by dividing the cost of goods sold by the average inventory. In this case, the cost of goods sold is $45,000, and since no beginning inventory is provided, we use the current inventory of $20,000 as the average inventory. Thus, the inventory turnover is $45,000 / $20,000 = 2.25.

Bill's Bolo Business Has a Cost of Goods Sold of $45,000