What Is the Formula for the Average Inventory Turnover Period

question 31

Multiple Choice

What is the formula for the average inventory turnover period in days?

• A)(Average inventory held/Cost of sales)× 365.
• B)Average inventory held/Sales.
• C)Cost of sales/Average inventory.
• D)None of the above.

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Definitions:

Fair Market Values

The estimated price at which a property or asset would trade in a competitive auction setting.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Bonds Payable

A liability account that records the amounts a company owes to holders of its issued bonds, to be repaid at a specified maturity date.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.