"Toys 4 U" had cost of goods sold in 2012 of $8,191 million and $7,710 million in 2011.Their merchandise inventory in 2012 was $1,902 million and $2,464 million in 2011.What was their inventory turnover in 2012?

Question

Quizplus · Accepted Answer

Inventory turnover is calculated as cost of goods sold divided by average inventory. We can calculate the average inventory by adding the beginning and ending inventory for the year and dividing by 2.

For 2012: 
Average inventory = (1,902 + 2,464) / 2 = 2,183
Inventory turnover = 8,191 / 2,183 = 3.75

Therefore, the answer is D) 3.75.

"Toys 4 U" Had Cost of Goods Sold in 2012