Which of the following is the formula to calculate a firm's inventory turnover ratio?

A. Inventory Turnover = Sales ÷ Inventory
B. Inventory Turnover = Cost of goods sold ÷ Inventory
C. Inventory Turnover = Inventory ÷ Current assets
D. Inventory Turnover = Inventory ÷ Accounts receivables
E. Inventory Turnover = (Sales - Cost of goods sold) ÷ Inventory


Answer: B

Business

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