Allison Robards is the owner of Backstreet Books, a small eclectic-style bookstore in a bustling college town. Allison prides herself in selecting hard to find books and magazines that her clientele enjoy. Recently, Allison is experiencing a cash flow shortage, and she is concerned that she may be purchasing too many copies of each title. Having recently completed a business class, you suggest to Allison that she calculate the ______________ ratio for her store, and then compare it to other stores in her industry.
A) current
B) debt to equity
C) return on equity
D) inventory turnover

Question

Quizplus · Accepted Answer

The inventory turnover ratio is used to measure how quickly a company can sell its inventory. For a bookstore like Backstreet Books, this would show how many times the store is selling and replacing its inventory in a given period. By comparing this ratio to other stores in the industry, Allison can see how efficiently she is managing her inventory and make adjustments as necessary.

Allison Robards Is the Owner of Backstreet Books, a Small