Inventory turnover measures how efficiently a company sells its inventory. It calculates the number of times inventory is sold and replaced within a given period, indicating how quickly a company can sell its products and generate revenue. A higher inventory turnover ratio indicates that a company is selling its inventory quickly and efficiently.

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Inventory Turnover

Question 64

Multiple Choice

Inventory turnover

A) is a measure of the profitability of selling inventory.
B) is used to calculate how quickly customers pay for inventory they purchased.
C) is an indicator of how quickly suppliers are being paid by the company.
D) measures how efficiently a company sells it inventory.

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