A retailer in Las Vegas has an ending inventory of $250,000 as of December 31, 2012 and the following accounting information.
Month ending inventory cost of goods sold
January 225000 1200000
February 325000 1250000
March 240000 1350000
April 325000 1500000
May 460000 950000
June 220000 850000
July 85000 1650000
August 156000 1325000
September 220000 1750000
October 265000 850000
November 100000 2200000
December 350000 3500000
a) Compute the monthly inventory turnover ratio for each of the twelve months.
b) What are the annual costs of goods sold an average inventory for the year?
c) Compute the annual inventory turnover ratio. How is the retailers performance compared to the industry standards, assuming it’s business is similar to Wal-mart’s?