The inventory turnover ratio compares:
A) current assets to inventory.
B) cost of goods sold to inventory.
C) average receivables to inventory.
D) average assets to inventory.

Question

Quizplus · Accepted Answer

The inventory turnover ratio compares the cost of goods sold to the average inventory for a period of time, showing how efficiently a company is able to manage their inventory by selling it off quickly.

The Inventory Turnover Ratio Compares