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      Question

      The term "Inventory Turnover Ratio"

      measures:
      A The liquidity of a business Correct Answer Incorrect Answer
      B The frequency at which stock is replenished Correct Answer Incorrect Answer
      C The cash conversion cycle Correct Answer Incorrect Answer
      D The company’s solvency Correct Answer Incorrect Answer
      E Net profit as a percentage of inventory Correct Answer Incorrect Answer

      Solution

      Inventory Turnover Ratio = COGS / Average Inventory. It shows how many times inventory is converted into sales, indicating efficiency in inventory management.

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