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The grocery industry has an annual inventory turnover of about 16 times. Organic​ Grocers, Inc., had a cost of goods sold last year of ​$10 comma 860,000​; its average inventory was ​$990,590. What was Organic​ Grocers' inventory​ turnover, and how does that performance compare with that of the​ industry?

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Answer:

Inventory turnover = Cost of goods sold  

                                  Average inventory

                               =  $10,860,000

                                  $990,590

                               =   11 times

The inventory turnover of 11 times implies that the Organic Grocers generates less sales from inventory compared with industry average.                                                                                                                                                                                                                                                                                                                                                                                                                                                      

Explanation:

Inventory turnover is the ratio of cost of goods sold to average inventory.

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