CONDENSED STATEMENT OF FINANCIAL POSITION OF ABC INC.

Assets

Cash----------------------------------------Php 300,000

Accounts Receivable------------------------ 600,000

Inventory--------------------------------------1,350,000

Prepaid Expenses-----------------------------450,000

Plant assets (net)--------------------------- 3,000,000

Other Assets------------------------------------300,000

TOTAL-----------------------------------Php 6,000,000

Liabilities

Current Liabilities------------------------Php 750,000

Non-current Liabilities----------------------1,500,000

Shareholder's Equity

Share capital, par 10 ----------------Php 3,000,000

Accumulated profits---------------------------750,000

Total Liabilities and Equity----------Php 6,000,000

For the year, the company earned a gross profit of Php 4,800,000 on its sales of Php 12,000,000 (all on accounts). Accounts receivable, inventory and plant assets remained relatively constant during the year.

Required

1. Inventory Turnover Ratio

Formula: INVENTORY TURNOVER RATIO = COGS / Average Inventory