Inventory turnover

Inventory turnover - company's operations should be used...

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Inventory turnover.  The  inventory turnover ratio  measures the number of times the company sells  its inventory during the period. It is calculated by dividing the cost of goods sold by average  inventory. Average inventory is calculated by adding beginning inventory and ending inventory and  dividing by 2. If the company is cyclical, an average calculated on a reasonable basis for the 
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Unformatted text preview: company's operations should be used such as monthly or quarterly. Calculation of Inventory Turnover 20X1 20X0 20W9 Cost of goods sold $70,950 $59,740 Inventory 12,309 12,202 $12,102 Average inventory (12,309+12,202) / 2 = (12,202+12,102) / 2 = 12,255.5 12,152 Inventory turnover $70,950 / $12,255.5 = $59,740 / $12,152 = 20X1 20X0 20W9 5.8 times 4.9 times...
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This note was uploaded on 11/15/2011 for the course ACCT 2310 taught by Professor Staff during the Spring '09 term at Texas State.

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Inventory turnover - company's operations should be used...

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