Question

if costs of goods sold (cogs) are $9,000 and average inventory is $3,000, what is the inventory turnover ratio?
6
3
9

Explanation:

Step1: Recall the formula for inventory turnover ratio

The formula for inventory turnover ratio is \(\text{Inventory Turnover Ratio}=\frac{\text{Cost of Goods Sold (COGS)}}{\text{Average Inventory}}\).

Step2: Substitute the given values into the formula

We are given that COGS = \$9,000 and Average Inventory = \$3,000. Substituting these values into the formula, we get \(\text{Inventory Turnover Ratio}=\frac{9000}{3000}\).

Step3: Perform the division

\(\frac{9000}{3000} = 3\).

Answer:

3