alleryStart learning →Inventory turnover and days' sales in inventory both belong to which ratio family?
AProfitable
BEfficiency
CLiquidity
DSolvency
Answer & Solution
Correct answer: B. Efficiency
1. Group the named ratios into their family.
2. There are four main types of ratios.
3. Four efficiency ratios are examined together.
4. They are accounts receivable turnover, total asset turnover, inventory turnover and days' sales in inventory.
5. So both inventory measures are efficiency ratios.
_Source: OpenStax Principles of Finance (CC BY 4.0), Ch 6 'Measures of Financial Health'_
Keep practising Financial Ratio Analysis
Browse all Financial Ratio Analysis questions for US CMA Part 2, or explore more Finance topics.
Related questions
Match each ratio familySet the current ratioJudge the assertion and the reasonSort the ratio familiesBuild the working capital figureComparing a firm's ratios against rivals in the same sector uses which stated purpose of rA current ratio below one means current liabilities exceed:A firm that can pay next month's bills but not its ten-year debt is strong in which respec