NextWave Innovations has the following inventory data for the year:

• Beginning Inventory: £30,000
• Purchases: £120,000
• Ending Inventory: £20,000
• Sales Revenue: £200,000

Requirements:

1. Calculate the Cost of Goods Sold (COGS) for the year.
2. Prepare an income statement for NextWave Innovations for the year ended 31 December 2021.
3. Determine the inventory turnover ratio and explain its significance.