The inventory turnover measures
A)How many days,on average,it takes between when an order is placed until the inventory is shipped.
B)How many times,on average,a company's inventory is sold during the year.
C)How many times,on average,the company takes to replace inventory during the year.
D)How many days,on average,it takes between when inventory is received to its sale to customers.

Question

Quizplus · Accepted Answer

Inventory turnover measures how many times, on average, a company's inventory is sold during the year. It is calculated by dividing the cost of goods sold by the average inventory for the year. This ratio helps to measure the efficiency of a company's inventory management and is an important metric for financial analysis.

The Inventory Turnover Measures