Which of the following is the formula to compute inventory turnover?
A)Net credit sales/average inventory
B)Average net accounts receivable/one day's sales
C)Net credit sales/average net accounts receivable
D)Cost of goods sold/average inventory

Question

Quizplus · Accepted Answer

Inventory turnover is computed using the formula: Cost of goods sold/average inventory. This formula measures how efficiently a company is managing its inventory by calculating how many times a company sells its average inventory during a given period.

Which of the Following Is the Formula to Compute Inventory