Accounting for IGCSE & O level - Advanced Principles (Section 6 - No. 28)

What is the primary purpose of tracking and analyzing the inventory turnover ratio?
To determine a company's profitability.
To assess how efficiently a company manages its inventory.
To calculate a company's debt-to-equity ratio.
To identify the company's largest expenses.

Explanation

The primary purpose is to evaluate inventory management.

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