Given the sales and COGS data, what is the turnover rate if Sales are $196,000, COGS is $140,000, and Average Inventory is $56,000?

To determine the turnover rate, you can use the formula:

[ \text{Turnover Rate} = \frac{\text{Cost of Goods Sold (COGS)}}{\text{Average Inventory}} ]

Given the data:

• COGS = $140,000

• Average Inventory = $56,000

By substituting these values into the formula:

[ \text{Turnover Rate} = \frac{140,000}{56,000} ]

When you perform the calculation, you find:

[ \text{Turnover Rate} = 2.5 ]

This indicates that the inventory turns over 2.5 times within the given period. A high turnover rate can often signify efficient inventory management, suggesting that the business is selling goods quickly relative to the inventory it holds. This is a crucial measure in assessing how well a company manages its stock and converts it into sales.

While other options present different turnover rates, they do not align with the calculated figure based on the provided sales and cost data. Understanding this calculation is essential for managing inventory and making informed financial decisions in golf operations and beyond.