Which of the following formulas is used to determine a company's inventory turnover?
A)Cost of goods sold / Average inventory
B)Average inventory / Cost of goods sold
C)Cost of goods sold x Average inventory
D)Average assets / Cost of goods sold

Question

Quizplus · Accepted Answer

Inventory turnover is calculated by dividing the cost of goods sold by the average inventory for the period. Therefore, formula A (Cost of goods sold / Average inventory) is the correct formula for calculating inventory turnover.

Which of the Following Formulas Is Used to Determine a Company's