Inventory Turnover Is Computed by Dividing Average Merchandise Inventory by Cost

question 139

True/False

Inventory turnover is computed by dividing average merchandise inventory by cost of goods sold.

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Definitions:

Earnings Per Share

Earnings per share (EPS) is a financial metric that represents the portion of a company's profit allocated to each outstanding share of common stock, indicating the company's profitability.

Excess Cash

The amount of cash holdings that exceed the normal operational needs of a company.

Stock Repurchase

A business operation where a company repurchases its shares from the market, leading to a decrease in the total number of shares available.

Repurchase

Another method used to pay out a firm’s earnings to its owners, which provides more preferable tax treatment than dividends.