Question

Which financial statements are needed to calculate the inventory turnover ratio? (check all that apply)

1) Income statement
2) statement of retained earnings
3) management's responsibility report
4) balance sheet

Answer 1

The financial statements needed to calculate the inventory turnover ratio are the Income Statement and the Balance Sheet.

Step-by-step explanation:

The financial statements needed to calculate the inventory turnover ratio are the Income Statement and the Balance Sheet.

The Income Statement provides information about the company's net sales and cost of goods sold, which are necessary for calculating the inventory turnover ratio.

The Balance Sheet provides information about the company's beginning and ending inventory levels, which are also needed for the calculation.