If had net credit sales of $13,000,000 and cost of goods sold of $9,250,000 for the year. the average inventory for the year amounted to $1,250,000. the inventory turnover for the year is: 7.4 times.
Given data:
Net credit sales = $13,000,000
Cost of goods sold = $9,250,000
Average inventory = $1,250,000
Using this formula to determine the inventory turnover for the year
Inventory turnover = Net sales / Average inventory
Where:
Cost of goods sold = $9,250,000
Average inventory = $1,250,000
Let plug in the formula
Inventory turnover = $9,250,000 /$1,250,000
Inventory turnover = 7.4 times
Therefore the inventory turnover is 7.4 times .
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