Which of the following ratios is a measure of a company's ability to sell inventory?
A) The inventory turnover ratio is a measure of a company's ability to sell inventory.
B) The acid-test ratio is a measure of a company's ability to sell inventory.
C) The current ratio is a measure of a company's ability to sell inventory.
D) The day's sales in receivables is a measure of a company's ability to sell inventory.

Question

Quizplus · Accepted Answer

The inventory turnover ratio specifically measures how efficiently a company can sell and replace its inventory over a period. It is calculated by dividing the cost of goods sold by the average inventory, indicating how many times inventory is sold and replaced in a given period.

Which of the Following Ratios Is a Measure of a Company's