(The following information applies to Problems 110 through 127.)
The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.
-What is the firm's inventory turnover ratio?
A) 5.47
B) 5.74
C) 6.03
D) 6.33
E) 6.65

Question

Quizplus · Accepted Answer

The inventory turnover ratio is calculated by dividing the cost of goods sold by the average inventory. The cost of goods sold is $1,000,000 and the average inventory is $175,000. Therefore, the inventory turnover ratio is $1,000,000/$175,000 = 5.71. The closest answer choice is A) 5.47.

(The Following Information Applies to Problems 110 Through 127