Consider the following inventory data for two companies: Which of these companies had the higher inventory turnover ratio?

Question

Consider the following inventory data for two companies:  Which of these companies had the higher inventory turnover ratio?

Quizplus · Accepted Answer

To calculate inventory turnover ratio, we need to divide cost of goods sold by average inventory. As given in the data, Winters has a higher cost of goods sold value and a lower average inventory value compared to Nichols. Therefore, Winters has a higher inventory turnover ratio.

Consider the Following Inventory Data for Two Companies: Which