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mote1985 [20]
3 years ago
5

How long a company holds inventory before selling it can be measured by dividing cost of goods sold by the average inventory bal

ance to determine the:a. Price earnings ratio.b. Accounts receivable turnover.c. Current ratio.d. Inventory turnover.e. Days' sales uncollected.
Business
1 answer:
lisabon 2012 [21]3 years ago
5 0

Answer:

d. Inventory turnover

Explanation:

The formula to compute the inventory turnover is shown below:

= Cost of goods sold ÷ average inventory

where,  

Average inventory = (Opening balance of inventory + ending balance of inventory) ÷ 2

The inventory turnover should always be expressed in times

Hence, the most appropriate option is d.

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