Which of the following formulae is used to calculate stock turnover rate?
- \(\frac{sales}{\text{average stock}}\)
-
\(\frac{\text{cost of sales}}{\text{average stock}}\)
- \(\frac{\text{cost of sales}}{\text{opening stock}}\)
- \(\frac{\text{cost of production}}{\text{average stock}}\)
The correct answer is: B
Explanation
The inventory turnover ratio formula is the cost of goods sold divided by the average inventory for the same period.