Use the following information to answer questions
Green Thumb Garden Supplies reported the following information for 2015 and 2016.

-What is the inventory turnover ratio for 2016?
A)2.3 times
B)2.0 times
C)1.8 times
D)0.5 times

Question

Use the following information to answer questions 
Green Thumb Garden Supplies reported the following information for 2015 and 2016.
   
-What is the inventory turnover ratio for 2016?
A)2.3 times 
B)2.0 times 
C)1.8 times 
D)0.5 times

Quizplus · Accepted Answer

The inventory turnover ratio is calculated by dividing the Cost of Goods Sold by the Average Inventory. In 2016, the Cost of Goods Sold was $180,000 and the Average Inventory was $90,000 [(Beginning Inventory + Ending Inventory) / 2]. Therefore, the inventory turnover ratio for 2016 is 2.0 times (180,000 / 90,000).

Use the Following Information to Answer Questions