Inventory turnover is calculated by:
A)dividing sales by total inventory.
B)subtracting sales from total inventory.
C)dividing sales by accounts receivable.
D)subtracting sales from accounts receivable.
E)multiplying sales by total inventory.

Question

Quizplus · Accepted Answer

Inventory turnover is calculated by dividing sales (or cost of goods sold) by the average inventory, to measure how many times inventory is sold and replaced over a period. Option A is the closest to this definition, although it would be more accurate with "cost of goods sold" instead of "sales".

Inventory Turnover Is Calculated By