The Inventory Turnover Ratio Is Represented by Which of the Following

question 72

Multiple Choice

The inventory turnover ratio is represented by which of the following formulas?

• A) Net credit sales / Average inventory
• B) Average inventory / Net credit sales
• C) Cost of goods sold / Average inventory
• D) Average inventory / Cost of goods sold

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Definitions:

Price

The amount of money required to purchase a good or service, acting as a signal to both buyers and sellers in the market.

Quantity

The amount or number of a material or immaterial good that is measured or counted.

Market Price

The price at which goods and services are currently being sold in the market, influenced by supply and demand.

Equilibrium Price

The price point in the market at which the amount of goods being offered is equal to the amount of goods being sought.