Question
Zarruk Constructions DSO is 50 days (on a 365-day basis), accounts receivable are $100 million, and its balance sheet shows inventory of $190 million. What
Zarruk Construction’s DSO is 50 days (on a 365-day basis), accounts receivable are $100 million, and its balance sheet shows inventory of $190 million. What is the inventory turnover ratio?
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Inventory Turnover Ratio Cost of Goods Sold Average Inventory 100 million 190 million2 263 Explanation The inventory turnover ratio is calculated by dividing the cost of goods sold accounts receivable by the average inventory In this case the cost of goods sold is 100 million and the average inventory is the sum of beginning and ending inventory divided by 2 which is 190 million ...
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
11th edition
324422870, 324422873, 978-0324302691
