The _____ ratio indicates how fast firms sell their inventory items, measured in terms of the rate of movement of goods into and out of the firm.
A)asset turnover
B)inventory turnover
C)asset
D)inventory
E)cost of goods sold

Question

Quizplus · Accepted Answer

The inventory turnover ratio specifically measures how quickly a company is selling its inventory items in a given period. Option A (asset turnover) is a similar ratio, but it measures the overall efficiency of a company's use of its assets, while option E (cost of goods sold) is an expense account and does not measure turnover. Option C and D (asset and inventory) are incomplete answers.

The _____ Ratio Indicates How Fast Firms Sell Their Inventory