181k views
4 votes
As long as all sales requests are being met, a ______ inventory turnover ratio is better.

User Droo
by
4.1k points

1 Answer

4 votes

Answer:

Higher

Step-by-step explanation:

The formula to compute the inventory turnover ratio is show below:

= Cost of goods sold ÷ average inventory

where,

Average inventory = (Opening balance of inventory + ending balance of inventory) ÷ 2

It shows a relation between the cost of goods sold and the average inventory which is shown above.

The more long sales request will higher the inventory turnover ratio and therefore inventory turnover ratio is performing better

User Pavel Stepanov
by
5.1k points