The Inventory Turnover Ratio Is Calculated as

question 19

Multiple Choice

The inventory turnover ratio is calculated as

• A) cost of goods sold divided by average inventory.
• B) average inventory divided by cost of goods sold.
• C) cost of goods sold times average inventory.
• D) average assets divided by cost of goods sold.

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Definitions:

Treasury Bond

A long-term, fixed-interest government debt security with a maturity of more than ten years.

Liquidity Risk

The risk of loss to an investor from the inability to sell a security to another investor at a price close to its true value.

Maturity Risk

The risk associated with the time until the bond or other fixed income instrument pays its principal back. It can affect interest rates and investment value.

Default Risk

The likelihood that a borrower will fail to meet the obligations of paying back debt, impacting the safety of the investment.