The inventory turnover ratio:
A)Is used to analyze profitability.
B)Is used to measure solvency.
C)Measures how quickly a company turns over its merchandise inventory.
D)Validates the acid-test ratio.
E)Calculation depends on the company's inventory valuation method.

Question

Quizplus · Accepted Answer

The inventory turnover ratio measures how quickly a company turns over its merchandise inventory. It is a measure of efficiency and is used to evaluate a company's ability to manage its inventory.

The Inventory Turnover Ratio