Music Masters sells a unique assortment of sheet music including just about any published music ever written before 1970. Its customers are high school and college band directors and choir directors who require several copies of the same music, including music written for a variety of instruments. To buy inventory for resale, the business seeks out wholesalers with large inventories. Due to the fact that cash flow is always an important concern, the owner keeps a watchful eye on how quickly various genres of sheet music sell. To help him in this assessment, which of the following ratios would be an important part of this company's financial analysis?(1) asset turnover ratio(2) inventory turnover ratio(3) cost of goods sold turnover ratio(4) sales turnover ratio

Inventory turnover ratio refers to how many times has a company sold and replaced its inventory during a year. Usually the higher the inventory turnover the better for a company since it means it has strong sales.

In this case, Music Masters can use the information about inventory turnover to determine what kind of music it sells most frequently. It can use this information to make some marketing decisions and develop strategies.

The inventory turnover ratio is calculated by dividing COGS by average inventory.