Lost Shoe Company, a retailer, had cost of goods sold of $220,000 last year.The beginning inventory balance was $30,000 and the ending inventory balance was $21,000.The company's inventory turnover ratio was closest to

Question

Quizplus · Accepted Answer

The inventory turnover ratio is calculated as Cost of Goods Sold divided by Average Inventory. Average Inventory is calculated as (Beginning Inventory + Ending Inventory) / 2. So, Average Inventory = ($30,000 + $21,000) / 2 = $25,500. Inventory Turnover Ratio = $220,000 / $25,500 = 8.63.

Lost Shoe Company, a Retailer, Had Cost of Goods Sold