Which of the following ratios is used to determine how quickly and easily a company is able to sell its inventory?
A)Price/earnings ratio
B)Inventory turnover
C)Return on net sales
D)Current ratio

Question

Quizplus · Accepted Answer

Inventory turnover ratio is used to determine how frequently a company sells and replaces its inventory over a certain period of time. It is calculated by dividing the cost of goods sold by the average inventory value for that period. A high inventory turnover ratio indicates that a company is efficiently selling its products and replenishing its inventory, while a low ratio indicates slow sales or excess inventory.

Which of the Following Ratios Is Used to Determine How