Beginning inventory at cost $9,000, ending inventory at cost $7,000, net sales $50,000, cost of goods sold $46,000. The inventory turnover at cost is

Question

Accounting  questions that I need answered to , can you help me.

Beginning inventory at cost $9,000, ending inventory at cost $7,000, net sales $50,000, cost of goods sold $46,000. The inventory turnover at cost is.

Answer 1

Hi there!

The inventory turnover ratio measures how often you "flip" inventory or sell your goods each year.

Beginning Inventory: 9,000

Ending Inventory: 7,000

Average Inventory (9,000 + 7,000)/2 = 8,000

Inventory Turnover Ratio = Cost of Goods Sold/Average Inventory

Inventory Turnover Ratio = 46,000/8,000

Inventory Turnover Ratio = 5.75

The business "flips" their inventory 5.75 times per year.

Answer 2

Answer: Inventory turnover ration is 5.75

 

Initial inventory is 9,000 and ending inventory is 7,000 so the average inventory is 8,000.  You then divide this into your cost of goods sold (COGS) and get 5.75 as your answer.