When Calculating ROI on Inventory, Inventory Turnover Is Calculated By

question 19

Multiple Choice

When calculating ROI on inventory, inventory turnover is calculated by:

• A) Gross margin divided by Inventory
• B) Gross margin divided by Average inventory
• C) Sales revenue divided by Inventory
• D) Sales revenue divided by Average inventory

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Definitions:

Cash Sales

Transactions where goods or services are paid for with cash at the time of the sale.

Sales Discount

is a reduction in the listed price of a product or service offered to customers as an incentive to prompt payment.

Sales Discount

A reduction in the price of goods or services offered by the seller to the buyer as an incentive for early payment.

Charge Customer

The act of billing a customer for goods or services provided, usually resulting in an accounts receivable entry for the business.