The Grand Department Store had net credit sales of $12,000,000 and cost of goods sold of $8,000,000 for the year.The average inventory for the year amounted to $1,600,000. The inventory turnover ratio for the year is
A) 4.0 times.
B) 7.2 times.
C) 5.0 times.
D) 2.5 times.

Question

Quizplus · Accepted Answer

Inventory turnover ratio = Cost of Goods Sold / Average Inventory
= $8,000,000 / $1,600,000
= 5 times.

Therefore, the correct choice is C) 5.0 times.

The Grand Department Store Had Net Credit Sales of $12,000,000