When calculating ROI on inventory, inventory turnover is calculated by:

Question

Quizplus · Accepted Answer

Inventory turnover is a ratio that measures the number of times inventory is sold and replaced over a period. The formula for inventory turnover is sales revenue divided by average inventory. This measures how efficiently a company is managing its inventory and generating sales from its inventory investments. Option D (Sales revenue divided by Average inventory) is the only choice that accurately reflects this formula.

When Calculating ROI on Inventory, Inventory Turnover Is Calculated By