Question

Elephant, Inc.'s cost of goods sold for the year is​ $2,000,000, and the average merchandise inventory for the year is​ $129,000. Calculate the inventory turnover ratio of the company.​ (Round your answer to two decimal​ places.)

Answer 1

15.50

Step-by-step explanation:

Stock turnover or inventory turnover can be defined as the ratio of the number of times a company has sold or replaced inventory during a given period , generally a year, .

.

It can be computed as follows -

=
`(cost of goods sold)/(average stock)`

therefore,

=
`(2,000,000)/(129,000)`

= 15.50