Inventory ratio is the most frequently used activity ratio. It is the cost of sold goods divided by average inventory.

Name: Inventory ratio is the most frequently used activity ratio. It is the cost of sold goods divided by average inventory.
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Quizplus · Accepted Answer

The statement is correct. Inventory ratio is also known as inventory turnover ratio, and it is a measure of how efficiently a company is managing its inventory. The formula for inventory turnover ratio is cost of goods sold divided by average inventory.

Inventory Ratio Is the Most Frequently Used Activity Ratio