The company's gross profit ratio is 40%. With beginning inventory of $64,000, additional purchases of $27,000 and net sales for the quarter of $102,000, the controller estimated ending inventory values at:

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The gross profit ratio of 40% implies that the cost of goods sold (COGS) is 60% of net sales (100% - 40%). With net sales of $102,000, COGS is $102,000 * 60% = $61,200. The formula for COGS is: Beginning Inventory + Purchases - Ending Inventory = COGS. Plugging in the numbers: $64,000 + $27,000 - Ending Inventory = $61,200. Solving for Ending Inventory gives: $91,000 - $61,200 = $29,800.

The Company's Gross Profit Ratio Is 40