Which of the following ratios is used to analyze a company's asset efficiency?
A)return on assets
B)inventory turnover ratio
C)earnings per share
D)debt-to-total assets ratio

Question

Quizplus · Accepted Answer

The inventory turnover ratio is a measure of how efficiently a company is managing and utilizing its inventory to generate sales. It is calculated by dividing the cost of goods sold by the average inventory for a given period. This ratio provides insight into a company's ability to effectively turn inventory into revenue and is commonly used to assess asset efficiency. The other ratios listed (return on assets, earnings per share, and debt-to-total assets ratio) are used to analyze different aspects of a company's financial performance.

Which of the Following Ratios Is Used to Analyze a Company's