Recall the formula for computing a company's inventory turnover ratio.

Inventory turnover $=$ Cost of goods sold$/$Gross profit

Inventory turnover $=C{}^{Im}$ of goods sold$/$Average inventory

Inventory turnover $=$ Merchandise Inventory$/$Cost of goods sold

Inventory turnover $=$ Merchandise Inventory$/$Average inventory

Recall the formula for computing a company's inventory turnover ratio.

Inventory turnover $=$ Cost of goods sold$/$Gross profit

Inventory turnover $=C{}^{Im}$ of goods sold$/$Average inventory

Inventory turnover $=$ Merchandise Inventory$/$Cost of goods sold

Inventory turnover $=$ Merchandise Inventory$/$Average inventory

Review the statements below and select the ones that are correct regarding the days' sales in inventory ratio. $($Check all that apply.$)$

The ratio reveals how much inventory is available in terms of the number of days' sales.

The ratio is useful in evaluating how quickly inventory is being sold.

The ratio estimates how many days it will take to convert inventory into accounts receivable or cash.

The ratio is often viewed as a measure of the buffer against out$-$of$-$stock inventory.

The ratio measures what percentage of profit the company is making for every dollar of inventory it sells.

Review the statements below and select the ones that are correct regarding the days' sales in inventory ratio. $($Check all that apply.$)$

The ratio reveals how much inventory is available in terms of the number of days' sales.

The ratio is useful in evaluating how quickly inventory is being sold.

The ratio estimates how many days it will take to convert inventory into accounts receivable or cash.

The ratio is often viewed as a measure of the buffer against out$-$of$-$stock inventory.

The ratio measures what percentage of profit the company is making for every dollar of inventory it sells.