The Inventory Turnover Ratio Is Calculated As

question 188

Multiple Choice

The inventory turnover ratio is calculated as:

• A)Cost of goods sold divided by ending inventory times 365.
• B)Sales divided by cost of goods sold.
• C)Ending inventory divided by cost of goods sold.
• D)Cost of goods sold divided by ending inventory.
• E)Cost of goods sold divided by average merchandise inventory.

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Definitions:

Percentage Change

A measure expressing the relative difference between a new value and an old value, often used to describe changes in financial or statistical data.

Gross Profit

The financial performance metric that subtracts the cost of goods sold from total revenue, indicating the efficiency of the core business activities.

Net Sales

The total revenue from sales minus returns, allowances, and discounts.

Cost Of Goods Sold

The direct outlays for materials and labor involved in the production of a company's goods for sale.