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Waters Department Store had net credit ales of $16mil and cost of goods sold of $12mil for the year. The average inventory for the year amounted to $2mil. inventory turnover for the year is

Respuesta :

Answer:

6 million is the inventory turnover

Explanation:

The formula to calculate inventory turnover = [tex]\frac{Cost of goods sold}{Average Inventory}[/tex]

Here we are provided,

Cost of goods sold = $12 million

Average Inventory = $2 million

Or it is calculated by using the formula [tex]\frac{Sales}{Inventory[/tex]

Here, we are not provided with total sales, therefore, this formula cannot be used.

Using the former formula we have,

[tex]\frac{12 million}{2 million}[/tex] = 6 million.

Final Answer

6 million is the inventory turnover

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