Use the following to calculate the inventory turnover ratio for the year 2017
2017 2016
Cost of Goods Sold 585,000 475,000
Merchandise Inventory 320,000 295,000
What will be an ideal response
Inventory turnover ratio = Cost of Goods Sold/ [(Beginning merchandise inventory + Ending merchandise inventory) / 2] = $585,000 / [($320,000 + $295,000 ) / 2 ] = $585,000 / 307,500 = 1.90 times
Business
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