Reading 15, example 2, question #8

[kowalski]

In example 2, three years of financial data is provided. Question 8 asks to compute inventory turnover ratio, days of inventory on hand, and etc.
Regarding the inventory turnover ratio, the solution shows that average inventory consists of the 2008 inventory and 2007 inventory.
Why was 2006 not included in the average inventory?

 

[cpk123]

for which period is the inventory turnover being calculated?
I believe it is for the final period 2008 - so average of 2007 and 2008 is taken as the denominator.

 

[kowalski]

Thanks