The inventory turnover ratio calculates:
A)how many times the inventory turns over in one period.
B)number of times inventory is purchased in one period.
C)the dollar amount of change in inventory in one period.
D)None of these answers is correct.

Question

Quizplus · Accepted Answer

The inventory turnover ratio is a measure of how efficiently a company is managing its inventory. It calculates how many times the inventory turns over in one period, which is typically one year. This is calculated by dividing the cost of goods sold by the average inventory value for the period.

The Inventory Turnover Ratio Calculates