Elementary Online Training had net sales of $750,000, sales returns of $10,000, sales allowances of $5,000, and cost of goods sold of $500,000. If its accounts payable is $50,000 and its average inventory value is $75,000, what is its inventory turnover ratio?
A) 3.33
B) 6.67
C) 4.70
D) 10.00
E) 3.13

Question

Quizplus · Accepted Answer

The inventory turnover ratio is calculated as Cost of Goods Sold divided by Average Inventory. Here, it is $500,000 / $75,000 = 6.67.

Elementary Online Training Had Net Sales of $750,000, Sales Returns