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
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.
Question : ------------------- ratio indicates the relationship between credit revenue from Operations and average trade receivables during the year.
Question : -------------------ratio indicates the relationship between credit purchases and average trade payables during the year.
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