Supply Chain Management

Answer: A - The cost of goods sold is the other important measure used to calculate inventory turnover ratio. The cost of goods sold is calculated by adding beginning inventory and inventory purchases and subtracting ending inventory. For example, if a firm began the relevant period with $30,000 of inventory, purchased $40,000 in inventory during that period and ended the period with $30,000, the cost of goods sold would be equal to $40,000 (30,000 + $40,000 - $30,000 = $40,000).