Accounting for IGCSE & O level - Advanced Principles (Section 4 - No. 2)
What is the formula to calculate the average inventory used in the inventory turnover ratio?
Beginning Inventory - Ending Inventory
(Beginning Inventory + Ending Inventory) / 2
Beginning Inventory + Ending Inventory
Ending Inventory / Beginning Inventory
Shpjegimi
Average Inventory is the sum of beginning and ending inventory, divided by two.