Inventory Turnover Calculation
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Below is selected data for Gertup Corporation as of 12/31/05:
Total assets $ 5,500
Current assets 2,750
Long-term debt 450
Current ratio 2.5
Inventory 1,500
For year ended 12/31/05
Sales $20,000
Cost of goods sold 16,000
Gertup has maintained the same inventory levels throughout 2005. If end of year inventory turnover was increased to 12 through more efficient relationships with suppliers how much cash would be freed up
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Solution Summary
The solution explains how to calculate the amount of cash freed up if the inventory turnover is increased
Solution Preview
Inventory turnover = Cost of goods sold/Inventory
With an inventory turnover of ...
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