The Inventory Turnover Ratio Is Computed by Dividing Cost of Goods

question 60

Multiple Choice

The inventory turnover ratio is computed by dividing cost of goods sold by

• A) beginning inventory.
• B) ending inventory.
• C) average inventory.
• D) 365 days.

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Definitions:

Product Differentiation Strategy

A business approach aimed at distinguishing a product or service from others in the market to attract a specific customer segment.

Inventory Turnover Ratio

Inventory turnover ratio is a financial metric that measures how many times a company's inventory is sold and replaced over a specific period, indicating efficiency in inventory management.

Net Profit Margin

A financial metric showing the amount of each sales dollar left over after all expenses have been paid.

Cash Coverage Ratio

A financial metric used to evaluate a company's ability to pay its debt obligations using its cash and cash equivalents.