Question : What formula is used to compute the inventory turnover ratio?
Option 1: Cost of Revenue from Operations/Average Inventory
Option 2: Average Inventory/Cost of Revenue from Operations
Option 3: Average Inventory/Revenue from Operations
Option 4: Gross Profit/Average Inventory
Correct Answer: Cost of Revenue from Operations/Average Inventory
Solution : The cost of Revenue from Operations divided by Average Inventory is the inventory turnover ratio. It shows how many times the stock converts to sales during the course of the accounting quarter. Hence option 1 is the correct answer.
Question : Cost of Revenue from Operations -
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.
Question : Which of the following statements is false?
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