What Is the Formula for Inventory Turnover

question 77

Multiple Choice

What is the formula for inventory turnover?

• A) annual cost of goods sold / average inventory in dollars
• B) annual sales / average inventory in dollars
• C) average inventory in dollars / annual cost of goods sold
• D) average inventory in dollars / annual sales
• E) annual cost of goods sold / annual holding cost

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Definitions:

Standard Deviation

A statistical measure of the dispersion or variability of a set of values, indicating how much the values in a data set differ from the mean.

Well-diversified Portfolio

An investment strategy that spreads risk by allocating investments among various financial instruments, sectors, or other categories.

Variability of Returns

The extent of fluctuation in the returns on an investment over a certain period of time, often used as a measure of investment risk.

Business-specific Risk

This is the risk associated with the unique factors impacting a specific company or industry, excluding broader market or economic risks.