What is the inventory turnover ratio for ABC Corp.if cost of goods sold equals $5,000, current ratio equals 3.0, quick ratio equals 1.5, and the firm has 1,800 in current assets?
A)4.25
B)5.56
C)6.75
D)7.85

Question

Quizplus · Accepted Answer

The inventory turnover ratio is calculated as Cost of Goods Sold divided by Average Inventory. Given the current assets and ratios, the inventory can be calculated as $1,800 / 3.0 = $600. Therefore, the inventory turnover ratio is $5,000 / $900 = 5.56.

What Is the Inventory Turnover Ratio for ABC Corp