Which of the following ratios best expresses inventory turnover?
A) Inventory/Working capital
B) Annul profits/Inventory
C) Inventory/Per unit cost of production
D) Cost of goods sold/Inventory

Question

Quizplus · Accepted Answer

Inventory turnover is expressed as Cost of goods sold/Inventory. Cost of goods sold (COGS) captures the firm's production cost of merchandise it has sold. Inventory is the cost of the firm's merchandise to be sold. This ratio indicates how much of a firm's capital is tied up in its inventory.

Which of the Following Ratios Best Expresses Inventory Turnover