Question : -----------------ratio indicates the relationship between the cost of revenue from operations (i.e., Cost of Goods Sold) during the year and average inventory kept during that year.
Option 1: Net profit ratio
Option 2: Trade receivable turnover ratio
Option 3: Inventory turnover ratio
Option 4: Working capital turnover ratio
Answer (1)
22nd Jan, 2024
Correct Answer: Inventory turnover ratio
Solution : Answer = Inventory turnover ratio
Inventory Turnover Ratio = Cost of goods sold / Average inventory
Inventory Turnover Ratio shows the Relationship Between cost of Goods sold and Average Inventory.
Hence, the correct option is 3.
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