Question

Calculate the annual stock turnover rate based on the following monthly sales and inventory figures. Calculate...

Calculate the annual stock turnover rate based on the following monthly sales and inventory figures. Calculate the stock-sales ratio for each month.

Month

Sales

Retail Stock

1

$11,686

$18,979

2

$12,535

$19,226

3

$14,889

$22,678

4

$15,756

$21,991

5

$14,342

$20,698

6

$13,676

$17,834

7

$15,889

$22,793

8

$16,756

$23,545

9

$15,342

$21,698

10

$14,676

$17,438

11

$16,889

$24,678

12

$17,756

$24,545

EOM

$22,756
Business   Accounting   
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Homework Answers

Answer #1

1. Stock turnover rate = Sales / Average stock

Average stock = (Beginning stock + Ending stock)/2 = ($18979 + $22756)/2 = $41735/2 = $20867.50

Annual stock turnover rate = $180192/$20867.50 = 8.64 times

2. Stock-sales ratio = Beginning stock/Monthly sales

Month Sales $ Retail Stock $ Stock-sales ratio
1 11686 18979 1.62
2 12535 19226 1.53
3 14889 22678 1.52
4 15756 21991 1.40
5 14342 20698 1.44
6 13676 17834 1.30
7 15889 22793 1.43
8 16756 23545 1.41
9 15342 21698 1.41
10 14676 17438 1.19
11 16889 24678 1.46
12 17756 24545 1.38
EOM 22756
Total $ 180192
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