Use the Following Information for Questions

question 61

Multiple Choice

Use the following information for questions.
Nelly Inc. reported net credit sales of $24,000,000 and cost of goods sold of $18,000,000 for the year. The average inventory for the year was $6,000,000.
-The inventory turnover ratio for the year was

• A) 3.0 times.
• B) 33.3 times.
• C) 4.0 times.
• D) 25.0 times.

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Definitions:

Balance Sheet

A financial statement that provides a snapshot of a company's financial position at a specific point in time, listing assets, liabilities, and equity.

Sales On Account

represent transactions where goods or services are sold with the agreement that payment will be made at a later date.

Cost Of Goods Sold

The total cost of manufacturing or acquiring the products sold by a company during a specific period, excluding indirect costs.

Acid-Test Ratio

A liquidity metric that measures a company's ability to pay off its current liabilities without relying on the sale of inventory.