Question

_____ refers to the number of times per year, on average, that a retailer sells its inventory.

1) Periodic inventory
2) Carrying cost of inventory
3) Inventory reserve
4) Perpetual inventory
5) Inventory turnover

Answer 1

The term referring to the number of times a retailer sells its inventory annually is called inventory turnover, which indicates the efficiency of inventory management.

Step-by-step explanation:

The term that refers to the number of times per year, on average, that a retailer sells its inventory is known as inventory turnover. This metric is essential for retailers to understand how efficiently they are managing their inventory. A higher inventory turnover rate indicates that a company sells its inventory quickly, which is generally a sign of good business performance, as products are not sitting idle on shelves. Conversely, a low turnover rate can indicate overstocking or poor sales.

Inventory turnover refers to the number of times per year, on average, that a retailer sells its inventory. It is a measure of how quickly a company sells its products. By dividing the cost of goods sold by the average inventory, you can calculate the inventory turnover. For example, if a company has $500,000 in cost of goods sold and an average inventory value of $100,000, the inventory turnover would be 5.