text: 28 November, 20:36
  
  # Compute the inventory turnover ratio using the following information: Net sales is \$100,000 for the year, costs of goods sold are \$40,000, last year's assets in place were \$900,000, and this year's assets in place are \$1,100,000. Receivables for both years are \$50,000. Inventory changed from \$30,000 last year to \$10,000 this year.
  
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  1. 28 November, 20:41
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  2
  
  Explanation:
  
  The formula for calculating inventory turn over:
  
  Costs of goods sold / average inventory
  
  In this case:
  
  Opening stock: \$ 30,000.00
  
  Closing stock: \$ 10,000.00
  
  Costs of goods sold : \$ 40,000.00
  
  Average inventory = Opening stock + closing stock/2
  
  = \$ 30,000 + \$ 10,000/2
  
  =\$ 40,000/2
  
  =\$ 20,00.00
  
  Inventory turnover = \$ 40,000.00/\$20,000.00
  
  =2
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