What is inventory turnover used for?
A) It is used to see how effectively managers utilize their investment in inventory.
B) It is used to calculate net sales.
C) It is used to measure average inventory.
D) It is to see how effectively buyers purchase the right assortments.
E) None of these

Question

Quizplus · Accepted Answer

Inventory turnover is used to see how effectively managers utilize their investment in inventory. It measures how many times a company's inventory is sold and replaced over a period of time. A high inventory turnover ratio indicates that a company is efficiently managing its inventory and generating sales. On the other hand, a low inventory turnover ratio indicates that a company is not managing its inventory effectively and may have excess inventory that is not generating sales.

What Is Inventory Turnover Used For