Discuss SOFE SOFA-CFE Exam Topic 6 Question 84

Which of the following is the formula for the inventory turnover?

AInventory turnover = Cost of Goods Purchased / Average Inventory

BInventory turnover = Cost of Goods Sold / Average Inventory

CInventory turnover = Cost of Goods Sold / Total Inventory

DInventory turnover = Cost of Goods Purchased / Total Inventory

Suggested Answer: C

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40 comments · newest first

Dana 10 months ago

D is totally wrong, just saying!

Annalee 11 months ago

Wait, is it really just Average Inventory? Sounds too simple.

Merissa 11 months ago

No way it's C, that doesn't add up!

Von 11 months ago

I thought it was A for a second, but B makes more sense.

Audra 11 months ago

It's definitely B, Cost of Goods Sold / Average Inventory.

Lajuana 12 months ago

I feel like I saw that the inventory turnover ratio is typically calculated using Cost of Goods Sold, so I’m leaning towards option B.

Audria 12 months ago

I keep mixing up the terms "average" and "total" inventory. I hope it's not the one with total inventory, but I can't recall for sure.

Felix 12 months ago

I remember practicing a similar question, and I believe the correct formula involves Cost of Goods Sold divided by Average Inventory.

Craig 1 year ago

I think inventory turnover is related to how quickly we sell our stock, but I'm not sure if it's Cost of Goods Sold or Purchased.

Margo 1 year ago

Inventory turnover is an important metric, so I want to make sure I get this right. I'll review the formulas in my notes before answering.

Ciara 1 year ago

The key here is to focus on the difference between Cost of Goods Purchased and Cost of Goods Sold. I think option A is the correct formula.

Iraida 1 year ago

Hmm, I'm a bit unsure about this one. I'll have to think it through carefully before selecting an answer.

Amie 1 year ago

I'm pretty sure the formula is Cost of Goods Sold divided by Average Inventory, so I'll go with option B.

Alecia 1 year ago

Ah, I remember learning this in class. The formula is Cost of Goods Sold divided by Average Inventory, so B is the answer.

Barney 1 year ago

Wait, that can't be right. Reducing cost and increasing complexity doesn't make sense as a benefit. Let me re-read the question and options carefully.

Benton 1 year ago

This is a tricky one, but I think the key is understanding the decentralized nature of blockchain technology. I'll need to carefully consider each option.

Providencia 1 year ago

Okay, I think I've got this. The key is understanding that each office in the P3O model has a specific purpose and area of focus, even though they may be performing similar functions. For example, one office might be more focused on strategic decision-making, while another is more concerned with day-to-day prioritization and support. I'll make sure to highlight those differences in my answer.

Sylvie 1 year ago

I bet the answer is B. Cost of Goods Sold divided by Average Inventory. That's the one that makes the most sense to me.

Patrick 1 year ago

↳ replying to Sylvie

I believe it's C) Inventory turnover = Cost of Goods Sold / Total Inventory

Ronna 1 year ago

↳ replying to Sylvie

I agree with you, B) Inventory turnover = Cost of Goods Sold / Average Inventory seems correct

Olen 1 year ago

↳ replying to Sylvie

I'm not sure, but I think it might be A) Inventory turnover = Cost of Goods Purchased / Average Inventory

Malika 1 year ago

↳ replying to Sylvie

I think you're right. B) Inventory turnover = Cost of Goods Sold / Average Inventory

Denise 1 year ago

Wait, is it Total Inventory or Average Inventory? I can never remember which one to use in the formula.

Ezekiel 1 year ago

↳ replying to Denise

Yes, you're right. Average Inventory is used in the formula to calculate inventory turnover.

Ezekiel 1 year ago

↳ replying to Denise

I think it's Average Inventory because it represents a more accurate picture of inventory levels over a period of time.

Ezekiel 1 year ago

↳ replying to Denise

B) Inventory turnover = Cost of Goods Sold / Average Inventory

Alayna 1 year ago

I know this one! It's Cost of Goods Sold divided by Average Inventory. Easy peasy!

Emile 1 year ago

↳ replying to Alayna

Thanks for clarifying! I'll remember now that inventory turnover is Cost of Goods Sold divided by Average Inventory.

Richelle 1 year ago

↳ replying to Alayna

I always get confused with inventory turnover formulas, but now I know it's Cost of Goods Sold divided by Average Inventory.

Louisa 1 year ago

↳ replying to Alayna

That's correct! It's Cost of Goods Sold divided by Average Inventory.

Theron 1 year ago

Hmm, I think it's Cost of Goods Purchased divided by Average Inventory. Hold on, let me double-check that...

Lindsey 1 year ago

↳ replying to Theron

Let me check the formula again to be sure.

Jacquline 1 year ago

↳ replying to Theron

I think it's actually Cost of Goods Sold divided by Average Inventory.

Cherrie 1 year ago

↳ replying to Theron

I believe it's Cost of Goods Purchased divided by Average Inventory.

Murray 2 years ago

The formula for inventory turnover is definitely Cost of Goods Sold divided by Average Inventory. I'm sure of that!

Michel 1 year ago

↳ replying to Murray

Actually, the correct formula for inventory turnover is Cost of Goods Purchased divided by Average Inventory.

Michel 1 year ago

↳ replying to Murray

Yes, you are correct! The formula for inventory turnover is Cost of Goods Sold divided by Average Inventory.

Bette 2 years ago

I'm not sure, but I think it's C) Inventory turnover = Cost of Goods Sold / Total Inventory.

Tenesha 2 years ago

I believe it is A) Inventory turnover = Cost of Goods Purchased / Average Inventory.

Xochitl 2 years ago

I think the formula is B) Inventory turnover = Cost of Goods Sold / Average Inventory.

SOFE SOFA-CFE Exam - Topic 6 Question 84 Discussion