The Robinson Company had a cost of goods sold of $1,000,000 in 2011 and $1,200,000in2012. Calculate the inventory turnover for each year. Comment on your findings. What would have been the amount of inventories in 2012 if the 2011 turnover ratio hadbeen maintained?

After establishing this, you can use the ratio to determine inventory turnover for each year. It is calculated by dividing cost of goods (COGS), by the average inventory. This allows us to determine which application will be most effective under certain circumstances. As an example, in 2011 the COGS for the year was $500,000 and there were $600,000. This gives a ratio of inventory turnover of 2. In 2012 it was $600,000. All this demonstrates why it’s now more critical than ever before equip oneself with necessary skills knowledge order adequately address any situation one may encounter throughout their journey no matter what comes up along way eventually leading successful outcome when all said done.
Answering your question, the amount of inventory in 2012 would have been $700,000. ($1.2 million divided 1.7).