Question

Sales divided by total inventory is called turnover, and this calculation indicates how many × a firm sells and replaces its inventory over the course of a year.

a) Inventory
b) Receivables
c) Liquidity
d) Asset

Answer 1

The turnover ratio is a measure of how quickly a firm sells and replaces its inventory.

Step-by-step explanation:

The correct answer is a) Inventory. The turnover ratio is a measure of how quickly a firm sells and replaces its inventory. It is calculated by dividing sales by the total inventory. A high turnover ratio indicates that a firm is selling its inventory quickly and efficiently.