Which ratio measures the ability of a company to sell inventory?
A)Inventory turnover ratio
B)Acid-test ratio
C)Current ratio
D)Day's sales in receivables

Question

Quizplus · Accepted Answer

The inventory turnover ratio measures how efficiently a company is able to sell its inventory by dividing the cost of goods sold by the average inventory during a certain period of time. A high inventory turnover ratio indicates that a company is effectively managing its inventory by selling it quickly and replenishing it with new inventory.

Which Ratio Measures the Ability of a Company to Sell