Inventory Turnover Calculation Example Help

Inventory Turnover Calculation Example, Sample, Illustration, Calculation,Concepts Help Online

 

Looking for Inventory Turnover Calculation Example, Sample, Illustration, Calculation help to do your assignment, homework or project then you are at the right place.
 

Inventory Turnover Calculation Meaning

 

The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is managed by comparing cost of goods sold with average inventory for a period. It calculates the number of times per period a business is able to replace its inventories.Inventory Turnover Ratio depends upon sales and purchases of inventory. Therefore, there must be a coordination between these two components.
 

The inventory turnover ratio is calculated as the cost of goods sold for a period divided by the average inventory for that period.Inventory turnover ratio is calculated using the following formula
 

Inventory Turnover = Cost of Goods Sold/Average Inventories
Cost of goods sold = Beginning Inventories + Cost of Goods Manufactured – Ending Inventories
Average Inventories = (Beginning Inventories + Ending Inventories)/2
 

Services We Offer

Features

Features for Accounting Assignment Help Services

Zero Plagiarism
We believe in providing no plagiarism work to the students. All are our works are unique and we provide Free Plagiarism report too on requests.

Best Customer Service
Our customer representatives are working 24X7 to assist you in all your assignment needs. You can drop a mail to assignmentconsultancy.help@gmail.com or chat with our representative using live chat shown in bottom right corner.

Three Stage Quality Check
We are the only service providers boasting of providing original, relevant and accurate solutions. Our three stage quality process help students to get perfect solutions.

100% Confidential
All our works are kept as confidential as we respect the integrity and privacy of our clients.

Our Clients

Most of our clients are from UK, USA, Australia, Canada , UAE, New Zealand, Doha, Qatar, Muscat, Netherlands, France, Italy, Great Britain, Singapore, Malaysia looking for quality and accurate solutions.

Testimonials

Our Testimonials

Yash Batra, Student , UK University

“Great Experts to provide real time Accounts help services. They are just best in their approach”

Reham Fayad, Student MBA, USA

“They have some of the best USA experts to provide Accounts help online and also help me in my online exams.”

Graham Golith, Lancashire University, UK

“Best place to get all help in Accounts Essay and Exams. Will definitely recommend to all”


 

Inventory Turnover Calculation Example Explanation

 

Example: Calculate inventory turnover and days inventories outstanding based on the information given below

Opening inventories $25,000
Closing inventories $30,000
Cost of goods manufactured $245,000
 

Solution

Cost of goods sold = $25,000 + $245,000 – $30,000 = $240,000

Average inventories = ($25,000 + $30,000) ÷ 2 = $25,500

Inventory turnover ratio = $240,000 ÷ $27,500 = 8.73

Days inventories outstanding = 365 ÷ 8.73 = 41.8
 

If you are looking for similar Inventory Turnover Calculation Example type assignment help,click here . You can visit us for more examples here.
 

Summary
User Rating
5 based on 1 votes