Question

stock velocity ratio is known as
a) turnover ratio
b) solvency ratio
c) liquidity ratio
d) profitability ratio​

Answer 1

Answer:

a.

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Answer 2

Concept:

Stock Velocity ratio calculates the rate at which the inventory is converted into cash. It tells us how long does it take to sell the the current stock of goods.

Given:

Four options-

a) turnover ratio

b) solvency ratio

c) liquidity ratio

d) profitability ratio​

To find:

What is stock velocity ratio also known as.

Solution:

Stock Velocity ratio is also known as Inventory turnover ratio.

So, it is a part of Turnover ratios.

It is calculated by using the formula- Net sales/ Inventory.

Therefore, the correct option is (a) turnover ratio.

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