The Clock Store had net credit sales of $ 7,500,000 and cost of goods sold of $ 4,500,000 for the year. The average inventory for the year amounted to $ 1,500,000. The inventory turnover ratio for the year is
A) 5 times.
B) 7.5 times.
C) 3 times.
D) 1.67 times.

Question

Quizplus · Accepted Answer

The inventory turnover ratio is calculated as Cost of Goods Sold divided by Average Inventory. Thus, $4,500,000 / $1,500,000 = 3 times.

The Clock Store Had Net Credit Sales of $ 7,500,000