Answered

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it is known that a target store can turn its inventory 5 times per year. suppose the annual sales revenue is $4 million, and the cost of goods sold is $2 million. what is the value of average inventory (in millions)?

Sagot :

The value of average inventory will be equal to $0.4 millions.

Inventory Turnover ratio is rate at which any company replaces its inventory by transporting all the manufactured goods. This tells that how good the production is going within the company and the company is in profit. The formula of Inventory turnover ratio is expressed as

Inventory turnover ratio = Cost of goods sold/Average value of inventory

On putting the values we get

5 = $2000000/Average value of inventory

Average value of inventory = $2000000/5

Average value of inventory = $400000

Average value of inventory = $0.4 millions

Learn more about Inventory turnover ratio at:

brainly.com/question/18914383

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