Question

If a company's cost of goods sold is $57,993 and its average inventory is $15,348, what is its approximate inventory turnover percentage?
Responses

3.78 percent
3.78 percent

2.65 percent
2.65 percent

8.91 percent
8.91 percent

4.27 percent

Answer 1

To calculate the inventory turnover ratio, you can use the following formula:

\[
\text{Inventory Turnover} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}}
\]

Given:

- Cost of Goods Sold (COGS) = $57,993
- Average Inventory = $15,348

Now, we can plug in the values:

\[
\text{Inventory Turnover} = \frac{57,993}{15,348} \approx 3.77
\]

To find the inventory turnover percentage, you would not typically express it as a percentage but if you want to convert the turnover into a percentage for a general understanding, you can calculate it as follows:

Since turnover isn't typically expressed as a percentage, you might be looking for the percentage of inventory being sold in a certain number of periods. This isn't directly applicable in standard practice for inventory turnover that is typically just a ratio.

However, as per the ratio calculated, round to two decimal points gives us approximately 3.78.

So the closest option that represents the ratio derived is:

**3.78 percent**