An inventory turnover of 3.65 means that,on average,items of inventory sat on a retailer's shelves for 100 days before being sold.

Question

Quizplus · Accepted Answer

Inventory turnover is calculated as the cost of goods sold divided by average inventory. If the inventory turnover is 3.65, it means that the retailer sold and replenished its inventory 3.65 times during the year, or approximately every 100 days (365/3.65). Therefore, the statement is true.

An Inventory Turnover of 3