Final answer:
The historical turnover ratio is the best option to better illustrate the liquidity of inventory in the financial statements or notes. The option (B) is correct.
Step-by-step explanation:
The best option to better illustrate the liquidity of inventory in the financial statements or notes is The historical turnover ratio. The historical turnover ratio is a measure of how quickly a company can sell its inventory. It shows the number of times the inventory is sold and replaced in a given period.
For example, if a company has a historical turnover ratio of 5, it means the inventory is turned over 5 times in a year, indicating higher liquidity as the inventory is being sold and replenished frequently. Therefore, option (B) is correct.