The Inventory Turnover Ratio

question 88

Multiple Choice

The inventory turnover ratio:

• A)Is used to analyze profitability.
• B)Is used to measure solvency.
• C)Reveals how many times a company sells its merchandise inventory during a period.
• D)Reveals how many days a company can sell inventory if no new merchandise is purchased.
• E)Calculation depends on the company's inventory valuation method.

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Definitions:

Assigning Causes

The process of identifying reasons or factors that have led to certain events or situations, also known as causal attribution.

Distinctiveness

The degree to which something is perceived as being different or unique compared to others.

Consistency

The quality of maintaining uniformity, coherence, and reliability in actions, attitudes, or conditions over time.

Consensus

A general agreement among a group of people, often used as a means of decision-making.