Inventory turnover is computed by
A)dividing the cost of goods sold by the average aggregate inventory value.
B)dividing the average aggregate inventory value by costs of goods sold.
C)multiplying the average aggregate inventory value by cost of goods sold.
D)subtracting cost of goods sold from the average aggregate inventory value.

Question

Quizplus · Accepted Answer

Inventory turnover is a ratio that shows how many times a company's inventory is sold and replaced over a period of time. It is calculated by dividing the cost of goods sold by the average aggregate inventory value. Choice A is the only option that correctly calculates inventory turnover.

Inventory Turnover Is Computed by