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Nelly Inc.reported credit sales of $24,000,000 and cost of goods sold of $18,000,000 for the year.The average inventory for the year was $6,000,000.
-The inventory turnover ratio for the year was
A)3.0 times.
B)33.3 times.
C)4.0 times.
D)25.0 times.

Question

Use the following information for questions 
Nelly Inc.reported credit sales of $24,000,000 and cost of goods sold of $18,000,000 for the year.The average inventory for the year was $6,000,000.
-The inventory turnover ratio for the year was
A)3.0 times.
B)33.3 times.
C)4.0 times.
D)25.0 times.

Quizplus · Accepted Answer

The inventory turnover ratio is calculated as Cost of Goods Sold / Average Inventory. For Nelly Inc., this is $18,000,000 / $6,000,000 = 3.0 times.

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