If a Retailer Had an Average Inventory of $80,000 (Retail)and

question 16

Multiple Choice

If a retailer had an average inventory of $80,000 (retail) and annual sales of $480,000,how many times has that retailer turned over its inventory?

• A) Four times a month
• B) Six times a month
• C) Four times a year
• D) Six times a year
• E) Eight times a year

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Definitions:

Profit Margin

Profit margin is a financial metric that calculates the percentage of revenue that exceeds the costs of production, indicating how much profit a company makes for each dollar of sales.

Debt/Equity Ratio

A calculation that shows how much a company relies on borrowed funds, found by dividing the sum of its liabilities by the equity owned by shareholders.

Long-term Debt Ratio

A financial ratio that shows the proportion of a company’s long-term debt compared to its total assets.

Total Debt

Refers to the sum of all financial obligations (short-term and long-term liabilities) owed by an individual or entity.