Procter & Gamble is a multinational corporation that manufactures and markets ma

Question

Procter & Gamble is a multinational corporation that manufactures and markets many products that you use every day. In 2008, sales for the company were $83,503 (all amounts in millions). The annual report did not report the amount of credit sales, so we will assume that all sales were on credit. The average gross profit percentage was 51.3 percent. Account balances follow:
Beginning Ending
Accounts receivable (net) $ 6,761 $ 6,629
Inventory 8,416 6,819

Compute the Inventory Turnover Ratio.

**The Inventory Turnover Ratio is Cost of Goods Sold/Avg Inventory. I can't determine the value of COGS in this question. Help please!!

Explanation / Answer

I had the wrong number of sales in the previous post: Inventory turnover = Cost of Goods Sold/Average Inventory COGS =(83,503*(1-.513)) = 40,665.961 million AVG inventory = (8,416 + 6,819)/2 = 7,617.5 million inventory turnover = 40,665.961/7617.5 = 5.338 times

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