Which one of the following best describes the Inventory Turnover Ratio? Select one:

a. Cost of Goods Sold / Average Inventory

I apologize for the answer, I leave the answer to experts specialists in this field that's not my specialty field

B. Average inventory / COGS

It gives the months of inventory you are holding. (Assuming COGS is monthly)

The correct option is  >>>>>>>>>>>>>> (a)

Hello Team,

Inventory turnover is a ratio showing how many times a company's inventory is sold and replaced over a period. The days in the period can then be divided by the inventory turnover formula to calculate the days it takes to sell the inventory on hand or "inventory turnover days."

Generally it is calculated as:

Inventory Turnover = Sales / Inventory

However, it may also be calculated as:

Inventory Turnover = Cost of Goods Sold / Average Inventory

Although the first calculation is more frequently used, COGS (cost of goods sold) may be substituted because sales are recorded at market value, while inventories are usually recorded at cost. Also, average inventory may be used instead of the ending inventory level to minimize seasonal factors.

This ratio should be compared against industry averages. A low turnover implies poor sales and, therefore, excess inventory. A high ratio implies either strong sales or ineffective buying.

High inventory levels are unhealthy because they represent an investment with a rate of return of zero. It also opens the company up to trouble should prices begin to fall

Regards,

Saiyid

Inventory turnover ratio =  Cost of Goods Sold / Average Inventory

Answer Is A.

I would like to vote for option A, a. Cost of Goods Sold / Average Inventory

thanks for invition ,,,,,,,,,,

my choice is option A 

Thanks for invitation

I am apologies to answer this question because it's not my specialist field

option " A "                           .