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    Inventory Turnover Ratio,

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    3. Chaka Company had no prepaid expenses and inventories remained unchanged during the year. Other selected year-end data for the company includes the following:
    Cost of goods sold $1,500,000
    Current liabilities 1,800,000
    Current ratio 3.0 to 1
    Acid-test ratio 2.5 to 1
    What was the company's inventory turnover ratio for the year? How may this information be used by managers, investors, or creditors?

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    Solution Preview

    3. Chaka Company had no prepaid expenses and inventories remained unchanged during the year. Other selected year-end data for the company includes the following:
    Cost of goods sold $1,500,000
    Current liabilities 1,800,000
    Current ratio 3.0 to 1
    Acid-test ratio 2.5 to 1
    What was the company's inventory turnover ratio for the year?
    Current assets ÷ $1,800,000 ...

    Solution Summary

    Chaka Company had no prepaid expenses and inventories remained unchanged during the year. Other selected year-end data for the company includes the following:
    Cost of goods sold $1,500,000
    Current liabilities 1,800,000
    Current ratio 3.0 to 1
    Acid-test ratio 2.5 to 1
    What was the company's inventory turnover ratio for the year? How may this information be used by managers, investors, or creditors?

    $2.19