You are provided with the following information about Gabarus Inc. (Gabarus): Cost of sales for the year

Question:

You are provided with the following information about Gabarus Inc. (Gabarus):
Cost of sales for the year ended June 30, 2018..... $27,050,000
Inventory balance on June 30, 2017........ $ 6,900,000
Inventory balance on June 30, 2018........ $ 7,800,000

Required:
a. Calculate Gabarus’s for the year ended June 30, 2018.
b. What is the average length of time it took Gabarus to sell its inventory in 2018?
c. Is Gabarus’s satisfactory? What would you need to know to fully answer this question?

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,...