Marlin wants to calculate the inventory turnover ratio for his company. He has the following information: beginning inventory = $30 000; ending inventory = $20 000; the cost of goods sold = $100 000. From this he concludes that the inventory turnover ratio is 4.0.

Question

Quizplus · Accepted Answer

Marlin correctly calculated the inventory turnover ratio by dividing the cost of goods sold ($100,000) by the average inventory (($30,000 + $20,000) / 2 = $25,000). This results in an inventory turnover ratio of 4.0.

Marlin Wants to Calculate the Inventory Turnover Ratio for His