Respuesta :
Analysis of inventory in an organization states the following: Average inventory of 63,510 units and cost of goods sold of $317,550 yield an inventory turnover of 5 units.
What does a review of the inventory mean?
You can choose how many items to keep on hand to meet demand without incurring excessive storage expenses by employing inventory analysis. The items that a company eventually plans to sell to clients are represented by inventory, an asset on the balance sheet.
What is inventory turnover?
Inventory turnover is the rate at which inventory stock is purchased, used up, and replaced. The inventory turnover ratio is calculated by dividing the cost of the items by the average inventory for the same time period. Good sales are normally indicated by a higher ratio, whereas poor sales are typically indicated by a lower ratio.
The inventory turnover ratio can be calculated by:
inventory turnover ratio= COGS / Average inventory
We put numbers in the formula
COGS = $317,550
Average inventory = $63,510
Inventory turnover ratio = $317,550/ $63,510
Inventory turnover ratio = 5
Most of the time, a larger ratio indicates that more sales are coming from the inventory.
Learn more about Inventory turnover ratio: https://brainly.com/question/8926991
#SPJ4
Otras preguntas
