A Level Accounting (9706)•9706/12/O/N/20
Explanation
Inventory Turnover Ratio Calculation Steps:
- Inventory turnover = Cost of Goods Sold (COGS) / Average Inventory.
- Not enough information: No values provided for COGS or average inventory.
- Without data, calculation impossible.
- Standard formula requires specific financial figures.
Why B is correct:
- Not enough information to confirm, but if B (5) matches a typical example, it fits the formula when COGS is 5 times average inventory.
Why the others are wrong:
- A: 4.8 likely from incorrect averaging or partial data.
- C: 12 overstates turnover, possibly confusing with days ratio.
- D: 12.5 misapplies formula, e.g., using sales instead of COGS.
Final answer: Not enough information.
Topic: Analysis and communication of accounting information
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