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how to calculate average inventory formula. Cost of Goods Sold Average Inventory Inventory Inventory Turnover Ratio. The purpose of the average inventory formula is to calculate the value of the inventory within that period of time.
How To Calculate Cost Of Goods Sold Ratio Cost Of Goods Sold Economics Lessons High School Cost Accounting from www.pinterest.com
To calculate the inventory turnover ratio cost of goods sold COGS is divided by the average inventory for the same period. In this case the Average age of inventory is 1000000 5000000 365 73 days. 1 Inventory Turnover Ratio Cost Of Goods Sold Average.
Average Inventory Period Days In Period Inventory Turnover.
To calculate the inventory turnover ratio cost of goods sold COGS is divided by the average inventory for the same period. Weighted Average Cost Method. Average inventory Starting Inventory Ending Inventory While this is the most popular method there is another way of average inventory calculation per period. In this case the Average age of inventory is 1000000 5000000 365 73 days.
