The Music Museum, LLC, sells a unique assortment of sheet music. The company indexes just about any published music ever written before 1970. Its customers are high school and college band directors, church choir directors, and glee clubs who require several copies of the same music, including music written for a variety of instruments. To buy inventory for resale, the business seeks out wholesalers with large inventories. Due to the fact that cash flow is always an important concern, the owner keeps a watchful eye on how quickly various genres of sheet music sell. To help him in this assessment, which of the following ratios would be an important part of this company's financial analysis?
A) Asset turnover ratio
B) Inventory turnover ratio
C) Sales turnover ratio
D) Cost of goods sold turnover ratio

Question

Quizplus · Accepted Answer

The inventory turnover ratio would be an important part of this company's financial analysis as it would help the owner assess how quickly the sheet music inventory is selling and make decisions about purchasing more or less inventory in the future.

The Music Museum, LLC, Sells a Unique Assortment of Sheet