Inventory turnover is a ratio that measures how many times a company sells and replaces its inventory in a given period. It is calculated by dividing the cost of goods sold (COGS) by the average inventory value. A higher inventory turnover indicates a more efficient use of inventory, while a lower turnover implies excess inventory or poor sales1.
Based on the values reported in the table, we can calculate the inventory turnover as follows:
Inventory Turnover = COGS / Average Inventory Value = $260,000 / $150,000 = 1.73
Therefore, the correct answer is C.
References := 1 Inventory Turnover - How to Calculate Inventory Turns2
