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During the current year,Carlin Equipment Stores had net sales of $500 million,a cost of goods sold of $400 million,average accounts receivable of $60 million,and average inventory of $50 million.
-Carlin Equipment 's inventory turnover rate is:
A)6.7 times.
B)8 times.
C)10 times.
D)1.25 times.

Question

Quizplus · Accepted Answer

Inventory turnover rate is calculated as Cost of Goods Sold / Average Inventory.

Cost of goods sold = $400 million

Average inventory = $50 million

Therefore,

Inventory turnover rate = $400 million / $50 million = 8 times.

The correct answer is B, 8 times.

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