Question

    Which of the following financial ratios measures a company's efficiency in managing its inventory?

    A Debt-to-equity ratio Correct Answer Incorrect Answer
    B Current ratio Correct Answer Incorrect Answer
    C Inventory turnover ratio Correct Answer Incorrect Answer
    D Gross margin ratio Correct Answer Incorrect Answer

    Solution

    The inventory turnover ratio measures a company's efficiency in managing its inventory by comparing its cost of goods sold to its average inventory level.

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