Inventory turnover ratio : This is a financial measure that is used to evaluate as to how many times a company sells or uses its inventory during an accounting period. It can be calculated by using the following formula: Inventory turnover = Cost of goods sold Average inventory Days’ sales in inventory: Days’ sales in inventory are used to determine number of days a particular company takes to make sales of the inventory available with them. Days' sales in inventory = Days in accounting period Inventory turnover Gross Profit Percentage: It is the financial ratio that shows the relationship between the gross profit and net sales. It represents gross profit as a percentage of net sales. Gross Profit is the difference between the total revenue and the cost of goods sold. It can be calculated by using the following formula: Gross profit percentage = Gross profit Net sales × 100 Note: Gross profit = Net sales – Cost of goods sold To Calculate: The inventory turnover for 2017, 2018, and 2019 of Corporation P.

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Chapter 6, Problem 6.14E

To determine

Inventory turnover ratio: This is a financial measure that is used to evaluate as to how many times a company sells or uses its inventory during an accounting period. It can be calculated by using the following formula:

Inventory turnover = Cost of goods soldAverage inventory

Days’ sales in inventory: Days’ sales in inventory are used to determine number of days a particular company takes to make sales of the inventory available with them.

Days' sales in inventory=Days in accounting periodInventory turnover

Gross Profit Percentage: It is the financial ratio that shows the relationship between the gross profit and net sales. It represents gross profit as a percentage of net sales. Gross Profit is the difference between the total revenue and the cost of goods sold. It can be calculated by using the following formula:

Gross profit percentage= Gross profitNet sales×100

Note: Gross profit=Net sales – Cost of goods sold

To Calculate: The inventory turnover for 2017, 2018, and 2019 of Corporation P.

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