Accounting for IGCSE & O level - Advanced Principles (Section 7 - No. 24)
What is the primary purpose of calculating the inventory turnover ratio?
To measure a company's profitability.
To assess how efficiently a company manages its inventory.
To determine the level of a company's debt.
To compare a company's sales to its cost of goods sold.
Forklaring
The inventory turnover ratio measures how efficiently inventory is managed.