Question

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

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 first option is the current ratio formula, and the second option does not relate to inventory turnover. So the correct formula for inventory turnover ratio is costs of goods sold divided by average inventory.

Answer:

costs of goods sold divided by average inventory