The inventory turnover ratio measures the efficiency of inventory management.

Question

Quizplus · Accepted Answer

The inventory turnover ratio is a financial ratio that calculates the number of times a company sells and replaces its inventory during a specific period. This ratio indicates the efficiency of a company's inventory management, as it helps to measure how quickly a company is selling its products and restocking their inventory. A higher inventory turnover ratio indicates that a company is managing its inventory efficiently and effectively, while a lower ratio indicates the opposite.

The Inventory Turnover Ratio Measures the Efficiency of Inventory Management