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)Cost of goods sold/average inventory
D)Net credit sales/average net accounts receivable

Question

Quizplus · Accepted Answer

The formula to compute inventory turnover is cost of goods sold divided by average inventory. This ratio measures how quickly a company is selling its inventory and replacing it with new inventory. A high inventory turnover indicates efficient management of inventory and a fast-moving business.

Which of the Following Is the Formula to Compute Inventory