Inventory turnover measures the relationship of inventory with _______.

Average sales

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Cost of goods sold

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Total purchases

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Total assets

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Solution

The correct option is B Cost of goods sold
Inventory turnover ratio shows how many times a company's inventory is sold and replaced over a period of time. It is an efficiency ratio. The equation for inventory turnover equals the cost of goods sold divided by the average inventory.

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Q. Inventory turnover ratio

=

Cost of __________ during the period

\div

Cost of average inventory held during the period.

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Inventory turnover measures the relationship of inventory with _______.

The correct option is B Cost of goods soldInventory turnover ratio shows how many times a company's inventory is sold and replaced over a period of time. It is an efficiency ratio. The equation for inventory turnover equals the cost of goods sold divided by the average inventory.

The correct option is B Cost of goods sold
Inventory turnover ratio shows how many times a company's inventory is sold and replaced over a period of time. It is an efficiency ratio. The equation for inventory turnover equals the cost of goods sold divided by the average inventory.