Which ratio measures how many days inventory is held before the final product is sold?
A)Inventory turnover
B)Days' sales in inventory
C)Total asset turnover
D)Inventory intensity ratio

Question

Quizplus · Accepted Answer

Days' sales in inventory measures the average number of days it takes for a business to sell its inventory. It is calculated by dividing the average inventory by the cost of goods sold and multiplying the result by 365. This ratio gives an idea of how quickly a company is able to sell its inventory, and a high number may indicate that the company is not managing its inventory effectively.

Which Ratio Measures How Many Days Inventory Is Held Before