[amp_mcq option1=”Cash ratio” option2=”Cost ratio” option3=”Stock velocity” option4=”Profit ratio” correct=”option3″]
The correct answer is: C. Stock velocity.
Inventory turnover ratio is a measure of how efficiently a company manages its inventory. It is calculated by dividing the cost of goods sold by the average inventory. A higher inventory turnover ratio indicates that a company is selling its inventory more quickly, which can be a sign of good management.
Cash ratio is a measure of a company’s liquidity. It is calculated by dividing cash and cash equivalents by current liabilities. A higher cash ratio indicates that a company has more cash on hand to meet its short-term obligations.
Cost ratio is a measure of the cost of goods sold as a percentage of sales. It is calculated by dividing cost of goods sold by sales. A higher cost ratio indicates that a company is spending more on its products, which can be a sign of inefficiency.
Profit ratio is a measure of a company’s profitability. It is calculated by dividing net income by sales. A higher profit ratio indicates that a company is earning more profit from its sales.