Which Ratio Measures How Many Days Inventory Is Held Before

question 123

Multiple Choice

Which ratio measures how many days inventory is held before the final product is sold?

• A)Inventory turnover
• B)Days' sales in inventory
• C)Total asset turnover
• D)Inventory intensity ratio

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Definitions:

Perfectly Elastic

Describes a situation in demand or supply where the quantity demanded or supplied changes infinitely in response to any change in price.

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogeneous product, and free entry and exit, which leads to price being equal to marginal cost.

Monopoly Market

A market structure where a single seller dominates, without any close substitutes for the product or service.

Generic Equivalents

Drugs that are chemically identical to a brand-name drug but sold under a generic name, usually at a lower cost.