Question

What does the stock turnover ratio (# of days) indicate in financial analysis?

A) The number of days stock is held before being sold
B) The number of days required to purchase new stock
C) The time taken to count the inventory
D) The time it takes for stock prices to change

Answer 1

The stock turnover ratio (# of days) indicates the number of days stock is held before being sold.

Step-by-step explanation:

The stock turnover ratio (# of days) indicates the number of days stock is held before being sold. It is a financial ratio that measures how quickly a company sells its inventory and replaces it with new stock. This ratio is calculated by dividing the average inventory by the cost of goods sold and multiplying it by the number of days in the period.