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31 January, 15:47

How long a company holds inventory before selling it can be measured by dividing cost of goods sold by the average inventory balance to determine the:a. Price earnings ratio. b. Accounts receivable turnover. c. Current ratio. d. Inventory turnover. e. Days' sales uncollected.

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  1. 31 January, 19:34
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    d. Inventory turnover

    Explanation:

    The formula to compute the inventory turnover is shown below:

    = Cost of goods sold : average inventory

    where,

    Average inventory = (Opening balance of inventory + ending balance of inventory) : 2

    The inventory turnover should always be expressed in times

    Hence, the most appropriate option is d.
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