Inventory turnover is a measure of liquidity that focuses on the relative size of inventory.

Name: Inventory turnover is a measure of liquidity that focuses on the relative size of inventory.
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Inventory turnover is calculated by dividing cost of goods sold by average inventory. This ratio tells how many times a company sells and replaces its inventory in a given period. Therefore, it is a measure of liquidity that focuses on the relative size of inventory.

Inventory Turnover Is a Measure of Liquidity That Focuses on the Relative