Which of the following is an important measure of the average movement of goods "on and off the shelf" of a company?
A) Profit margin.
B) Gross inventory ratio.
C) Price/earnings ratio.
D) Inventory turnover ratio.

Question

Quizplus · Accepted Answer

The inventory turnover ratio measures how quickly a company is selling and replacing its inventory. It is calculated by dividing the cost of goods sold by the average inventory. A high inventory turnover ratio indicates that a company is efficiently managing its goods on the shelf and quickly selling through its inventory. It is an important measure of a company's liquidity and efficiency.

Which of the Following Is an Important Measure of the Average