The following information relates to Woolf Unlimited for the past two years. What is the inventory turnover for the current year?

Question

The following information relates to Woolf Unlimited for the past two years.  What is the inventory turnover for the current year?

Quizplus · Accepted Answer

To calculate inventory turnover, we divide cost of goods sold by average inventory. From the given information, we can see that cost of goods sold for the current year is $3,450,000 and average inventory is $1,500,000. 
Therefore, inventory turnover for the current year = $3,450,000 / $1,500,000 = 2.30 times. 
Hence, the best choice is A) with the explanation as shown above.

The Following Information Relates to Woolf Unlimited for the Past