Question

The inventory turnover ratio measures: The portion of inventory that becomes obsolete each period. How many times the company purchases inventory during the current reporting period. The times per period the average inventory balance is sold. How many days it takes to collect its sales of inventory sold on account.

Answer 1

Answer:

The times per period the average inventory balance is sold.

Explanation:

The formula for inventory turnover is as follows:

$\frac{sales}{average \: inventory}$

Where:

Average inventory = (beginning inventory+ ending inventory)/ 2

Considering the formula this makes the third option the only correct answer As it do not consider obsolote neither purchases for the period.