Question

the inventory turnover ratio is equal to which of the following? costs of goods sold divided by average inventory interest expense divided by loans payable current assets divided by current liabilities

Explanation:

The inventory turnover ratio measures how efficiently a company manages its inventory. The formula for inventory turnover ratio is $\frac{\text{Cost of Goods Sold (COGS)}}{\text{Average Inventory}}$. The second option relates to interest and loans (not inventory turnover), and the third option is the current ratio (not inventory turnover). So the correct formula for inventory turnover is costs of goods sold divided by average inventory.

Answer:

A. costs of goods sold divided by average inventory