Which of the following ratios measures how effectively a firm is managing its assets?
A)Quick ratio
B)Times interest earned ratio
C)Profit margin ratio
D)Inventory turnover ratio
E)Price earnings ratio

Question

Quizplus · Accepted Answer

The inventory turnover ratio measures the number of times a company sells and replaces its inventory during a given period. A high inventory turnover ratio indicates effective asset management, as the firm is able to quickly sell and replace its inventory, reducing the amount of capital tied up in inventory.

Which of the Following Ratios Measures How Effectively a Firm