Accounting – 5.6 Incomplete records | e-Consult
5.6 Incomplete records (1 questions)
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Understanding Inventory Turnover: The inventory turnover ratio is calculated as Cost of Goods Sold / Average Inventory Value.
Rearranging the Formula: Average Inventory Value = Cost of Goods Sold / Inventory Turnover Ratio
Calculation: Average Inventory Value = £45,000 / 8.5 = £5,294.12 (rounded to the nearest pound)
Therefore, the average inventory value is £5,294.12.