The number of times an intermediary's average inventory is sold in a year is called the:
A) stockturn rate.
B) asset factor.
C) inventory ratio.
D) markup ratio.
E) ROI (return on inventory).

Question

Quizplus · Accepted Answer

The number of times an intermediary's average inventory is sold in a year is called the stockturn rate, which is calculated by dividing the cost of goods sold by the average inventory. This metric is important because it measures how quickly a company is selling its inventory and generating cash, which is essential for maintaining liquidity and profitability. The higher the stockturn rate, the more efficient the company is at managing its inventory.

The Number of Times an Intermediary's Average Inventory Is Sold