If cost of goods sold is 400,000 and average inventory is 100,000, what is the inventory turnover?

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Study for the ACFE Accounting Terms Test with interactive quizzes. Prepare with multiple choice questions, each question accompanied by explanations and hints. Ensure your success with our study materials!

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If cost of goods sold is 400,000 and average inventory is 100,000, what is the inventory turnover?

Inventory turnover shows how many times inventory is sold and replaced over a period. It is calculated by dividing cost of goods sold by average inventory. With a COGS of 400,000 and average inventory of 100,000, turnover = 400,000 / 100,000 = 4. This means inventory turned over four times during the period. A higher turnover suggests efficient inventory use, while a lower turnover may indicate excess stock. Using average inventory helps smooth out seasonal fluctuations.

If cost of goods sold is 400,000 and average inventory is 100,000, what is the inventory turnover?

Study for the ACFE Accounting Terms Test with interactive quizzes. Prepare with multiple choice questions, each question accompanied by explanations and hints. Ensure your success with our study materials!

If cost of goods sold is 400,000 and average inventory is 100,000, what is the inventory turnover?

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