A retailer in Las Vegas
A retailer in Las Vegas has an ending inventory of $250,000 as of December 31, 2016, and the following accounting information.
MONTH ENDING INVENTORY COST OF GOODS SOLD
January $225,000 $1,200,000
February $325,000 $1,250,000
March $240,000 $1,350,000
April $325,000 $1,500,000
May $460,000 $950,000
June $220,000 $850,000
July $85,000 $1,650,000
August $156,000 $1,325,000
September $220,000 $1,750,000
October $265,000 $850,000
November $100,000 $2,200,000
December $350,000 $3,500,000
1. Compute the monthly inventory turnover ratio for each of the twelve months.
2. What are the annual cost of goods sold and the average inventory for the year?
3. Compute the annual inventory turnover ratio. How is the retailer’s performance compare to the industry standard, assuming its business is similar to Walmart’s?