The financial statements of Flathead Lake Manufacturing Company are given below: Note: The common shares are trading in the stock market for $15 per share
-Refer to the financial statements of Flathead Lake Manufacturing Company.The firm's inventory turnover ratio is _________.Please keep in mind that when a ratio involves both income statement and balance sheet numbers,the balance sheet numbers for the beginning and end of the year must be averaged.
A) 11.6
B) 10.2
C) 9.5
D) 7.7

Question

The financial statements of Flathead Lake Manufacturing Company are given below:  Note: The common shares are trading in the stock market for $15 per share
-Refer to the financial statements of Flathead Lake Manufacturing Company.The firm's inventory turnover ratio is _________.Please keep in mind that when a ratio involves both income statement and balance sheet numbers,the balance sheet numbers for the beginning and end of the year must be averaged.
A) 11.6 
B) 10.2 
C) 9.5 
D) 7.7

Quizplus · Accepted Answer

Inventory turnover ratio = Cost of goods sold / Average inventory= 1,150,000 / (1,000,000 + 1,200,000) / 2= 1,150,000 / 1,100,000= 10.45 (rounded to 10.2)

The Financial Statements of Flathead Lake Manufacturing Company Are Given