inventory turnover

the book says inventory tunover= COGS/average inventory, but in many instances in the book, ending inventory was used. has anyone noticed this?

If they give you two years inventory figures, use the average. If only the ending year is provided, use that.

mbolzicco is correct. Best practice when using mixed ratios that involve the income statement and balance sheet is to use average balance sheet figures. Why? The income statement reflects cumulative activity over a period of time (between fiscal years), whereas the balance sheet is a snapshot at a single point in time (FYE). The use of balance sheet figures that aren’t averaged exposes you to the risk that extreme changes in assets or liabilities that may have occurred at the beginning/end of a FY misrepresent activity throughout the FY. It would be quite easy to game these types of financial metrics. I’ll wager it’s this type of logic that leads the Treasury Stock Method to require weighted-average basic common CSO for basic EPS, rather than simply basic common CSO at FYE. Anyway, just think of income statement figures paired with average balance sheet figures as a more credible alignment of time periods. Just my $0.02.

From http://www.cfainstitute.org/cfaprog/faq/faqs_candidates.html "If I am are trying to calculate a ratio that mixes income statement and balance sheet statement information, when should I use the average values of the balance sheet information as opposed to the beginning- or end-of-year values? On the exams, how should I calculate such a ratio? The way ratios are calculated depends on the availability of data and how particular ratios are going to be used. There is no “one size fits all” solution, and such differences are part of the nature of financial analysis. Candidates should be familiar with the assigned curriculum and be prepared to perform calculations and interpretations based on that curriculum. If it is relevant, the exam questions will normally specify how the calculation is to be performed (e.g., “use beginning-of-year balance sheet data for your calculations”). "

thanks, yep, should go through faq on CFA website as well