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Select one:a. Cost of Goods Sold / Average Inventoryb. Average Inventory / Cost of Goods Soldc. (Cost of Goods Sold - Net Sales) / Average Inventoryd. None of the above
Answer is a. Cost of Goods Sold / Average Inventory
It is the ratio of cost of goods sold by a business during an accounting period to the average inventory of the business during the period.
A.Cost of Goods Sold / Average Inventory
Answer B is correct because average inventory/cost of goods sold it measure how goods stay in the warehouse before they are been sold.
The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is managed by comparing cost of goods sold with average inventory for a period.
A) COGS / Avg. Inventory
c. (Cost of Goods Sold - Net Sales) / Average Inventory
AGREE WITH EXPERTS ANSWERS ..........................
