The ratio computed by dividing cost of goods sold by the average value of inventory is
A) return on owners' equity.
B) return on sales.
C) liabilities turnover.
D) current ratio.
E) inventory turnover.

Question

Quizplus · Accepted Answer

The inventory turnover ratio is calculated by dividing the cost of goods sold by the average inventory, measuring how efficiently a company manages its inventory.

The Ratio Computed by Dividing Cost of Goods Sold by the Average