Inventory turnover describes how efficiently a firm is managing its sales and purchases of inventory. This is an example of a(n) ________ ratio.

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Inventory turnover is a measure of how quickly a company is selling inventory and replacing it with new inventory. Therefore, it falls under the category of activity ratios, which measure how effectively a company is using its assets to generate revenue.

Inventory Turnover Describes How Efficiently a Firm Is Managing Its