Compute the monthly inventory turnover ratio

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A retailer in Las Vegas has an ending inventory of $250,000 as of December 31, 2012 and the following accounting information.

Month                                     ending inventory                  cost of goods sold

January                                  225000                                  1200000

February                                325000                                  1250000

March                                     240000                                  1350000

April                                        325000                                  1500000

May                                         460000                                  950000

June                                        220000                                  850000

July                                         85000                                                1650000

August 156000                                  1325000

September                             220000                                  1750000

October                                  265000                                  850000

November                              100000                                  2200000

December                              350000                                  3500000

a) Compute the monthly inventory turnover ratio for each of the twelve months.

b) What are the annual costs of goods sold an average inventory for the year?

 

c) Compute the annual inventory turnover ratio. How is the retailers performance compared to the industry standards, assuming it’s business is similar to Wal-mart’s?

Reference no: EM13788162

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