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1 December, 02:47

The 2016 financial statements of CVS Health Corporation reported the following information (in millions) : 2016 2015 Net sales $177,526 $153,290 Cost of sales 148,669 126,762 Inventories, net 14,760 14,001 The inventory turnover ratio for 2016 is: Select one: A. 9.22 B. 11.48 C. 9.33 D. 10.34 E. None of the above

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  1. 1 December, 03:17
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    option (D) 10.34

    Explanation:

    The inventory turnover ratio for 2016 will be given as:

    = [Cost of goods sold ] : Average inventory

    also,

    Cost of goods sold in 2016 = $148,669

    Average inventory = [ 2015 inventory + 2016 inventory ] : 2

    = [ 14,001 + 14,760 ] : 2

    = 28761 : 2

    = 14,380.5

    Therefore,

    The inventory turnover ratio for 2016 = $148,669 : 14,380.5

    = 10.34

    Hence,

    The answer is option (D) 10.34
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