The Inventory Turnover Ratio Calculates

question 8

Multiple Choice

The inventory turnover ratio calculates:

• A) how many times the inventory turns over in one period.
• B) number of times inventory is purchased in one period.
• C) the dollar amount of change in inventory in one period.
• D) None of these answers are correct.

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Definitions:

Retroactive Restatement

Adjusting previously reported financial statements to reflect better understanding or corrections of past errors.

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its share price.

Common Stock

Represents ownership shares in a corporation, giving holders a claim on part of the company’s assets and earnings.

Net Income

Total income of the company after expenses, taxes, and any other costs are deducted from its revenue.