The ratio that measures how many times a company replenishes its inventory in a year is the:
A)Days to sell.
B)Accounts receivable turnover ratio.
C)Inventory turnover ratio.
D)Days to collect ratio.

Question

Quizplus · Accepted Answer

The inventory turnover ratio measures the number of times a company's inventory is sold and replenished within a year. It is calculated by dividing the cost of goods sold by the average inventory. A higher inventory turnover ratio indicates that the company is selling its inventory quickly and efficiently.

The Ratio That Measures How Many Times a Company Replenishes