Annual data for ABC Corporation appear below, n millions o Sales Revenue Cost of Goods Sold Operating Income Ending inventory Ending Accounts Payable 2016 2017 126

Accounting Mar 19, 2021

Annual data for ABC Corporation appear below, n millions o

Sales Revenue Cost of Goods Sold Operating Income Ending inventory Ending Accounts Payable

2016 2017 126.1 131.

45.3 18.8 9.6 10.2
50.8 21.1 10.2 8.8
2019 144.5 150.4
54.6 20,9 10.8 9.5
55.3 23.3 9.6 10.2
Calculate ABCs inventory turnover ratio for 2019. Round your answer to 1 decimal place (xx.x).

Expert Solution

Computation of Inventory Turnover Ratio for 2019:

Inventory turnover ratio for 2019 = Cost of goods sold / Average inventory

Here,

Cost of goods sold = 55.3

Average inventory = (10.8 + 9.6) / 2 = 10.2

Inventory turnover ratio = 55.3 / 10.2 = 5.4

So, Inventory turnover ratio is 5.4 times.

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