Which Ratio Represents How Many Times a Company Replenishes Its

question 64

Multiple Choice

Which ratio represents how many times a company replenishes its inventory during the year?

• A) Average collection period for accounts receivable
• B) Accounts receivable turnover
• C) Inventory turnover
• D) Fixed asset turnover

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Definitions:

Money

Anything that is generally accepted in exchange for goods and services.

Capital

Assets used for the production of goods and services, including machinery, buildings, and equipment.

Economics

The social science that studies how individuals, governments, firms, and nations make choices on allocating scarce resources to satisfy their unlimited wants.

Profit

The financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes involved in sustaining the activity.