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Question : The inventory turnover ratio can be used to determine?

Option 1: Sales effectiveness

Option 2: Average Age of Inventory

Option 3: Sales Turnover

Option 4: Average Collection Period by dividing it into 365.


Team Careers360 3rd Jan, 2024
Answer (1)
Team Careers360 9th Jan, 2024

Correct Answer: Average Collection Period by dividing it into 365.


Solution : The average collection period is the length of time it takes for a company to obtain accounts receivable payments due from its clients.
By dividing the inventory turnover ratio by 365, the average Collection Period can be calculated.
Hence option 4 is the correct answer.

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