When Analyzing the Operating Performance of a Merchandise Firm,inventory Turnover

question 228

Essay

When analyzing the operating performance of a merchandise firm,inventory turnover and the gross profit ratio are usually calculated.What do the inventory turnover ratio and gross profit ratio indicate?

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Definitions:

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Partner

An individual who shares ownership of a business or an endeavor with one or more persons, often sharing in profits and responsibilities.

Profitability

The degree to which a business or activity yields financial profit or gain, often measured as a ratio of net income to revenue.

Guarantee

A formal promise or assurance, often provided by a third party, that certain conditions or obligations will be met.