{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Inventory turnover

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

This preview shows pages 1–2. Sign up to view the full content.

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

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

{[ snackBarMessage ]}

### Page1 / 2

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

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online