Which of the following is the formula to compute inventory turnover?
A) The formula is Net credit sales/Average inventory.
B) The formula is Net credit sales/Average net accounts receivable.
C) The formula is Cost of goods sold/Average inventory.
D) The formula is Average net accounts receivable/One day's sales.

Question

Quizplus · Accepted Answer

Inventory turnover is calculated by dividing the cost of goods sold by the average inventory. This measures how many times a company's inventory is sold and replaced over a period.

Which of the Following Is the Formula to Compute Inventory