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Question:

How many inventory turns will a pharmacy experience if it has an initial inventory of $225,000, a final inventory of $250,000, and sales totaling $2.6 million during the year?

A 10.95
Explaination

10.95. The average inventory can be calculated by adding the initial inventory ($225,000) and the final inventory ($250,000) and dividing the sum ($475,000) by 2, resulting in an average inventory of $237,500. Divide total sales ($2,600,000) by the average inventory ($237,500) = 10.95 inventory turns.