![]() The average inventory is determined by the arithmetic mean: The Cost of Goods Sold and Sales values can be taken from the Profit and Loss Statement, while the values for the average inventory can be found on the Balance Sheet. In another variation of this ratio calculation, the numerator does not reflect the cost of goods sold but uses the sales value instead. In the first option, when determining the inventory turnover, the numerator used the cost of goods sold, while the average value of the inventory for the analyzed period serves as a denominator. There are two options for calculating this ratio:
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