The formulas used in the calculations are:
\[ \text{Ending Inventory} = (\text{Starting Inventory} + \text{Net Purchases}) - \text{COGS} \]
\[ \text{Average Inventory} = \frac{\text{Starting Inventory} + \text{Ending Inventory}}{2} \]
\[ \text{Inventory Turnover} = \frac{\text{COGS}}{\text{Average Inventory}} \]
This calculator computes the Ending Inventory and Inventory Turnover based on the input values of starting inventory, net purchases, and cost of goods sold (COGS). The ending inventory is the monetary value of the inventory at the end of the accounting period, and the inventory turnover measures how many times the average inventory is sold during the accounting period.
Let's assume the following:
Calculate the ending inventory:
\[ \text{Ending Inventory} = (25,000 + 30,000) - 40,000 = 15,000 \]
Calculate the average inventory:
\[ \text{Average Inventory} = \frac{25,000 + 15,000}{2} = 20,000 \]
Calculate the inventory turnover:
\[ \text{Inventory Turnover} = \frac{40,000}{20,000} = 2.0 \]
Therefore, the ending inventory is $15,000 and the inventory turnover is 2.0.