Ask Question
4 June, 02:35

For the current year, Theta Corporation has beginning and ending inventories of $40,000 and $60,000, respectively. Cost of goods sold for the year is $240,000. What is the company's inventory turnover ratio?

+4
Answers (1)
  1. 4 June, 02:57
    0
    Inventory turnover ratio = 4.8

    Explanation:

    Giving the following information:

    Theta Corporation has beginning and ending inventories of $40,000 and $60,000, respectively. The cost of goods sold for the year is $240,000.

    The inventory turnover is the number of times the inventory gets replaced in a period.

    The formula to calculate the inventory turnover ratio, we need to use the following formula:

    Inventory turnover ratio = cost of goods sold / average inventory

    Average inventory = (beginning inventory + ending inventory) / 2

    Average inventory = (40,000 + 60,000) / 2 = 50,000

    Inventory turnover ratio = 240,000/50,000 = 4.8
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “For the current year, Theta Corporation has beginning and ending inventories of $40,000 and $60,000, respectively. Cost of goods sold for ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers