Question

The main purpose of ....... ratio is to show the
extent to which working capital is blocked in
inventories.
O Inventory turnover
O Stock to working capital
O Stock velocity
O
Debtors turnover ratio​

Answer 1

Answer:

answer is Inventory turnover

Answer 2

Given,

The main purpose of the----- ratio is to show the  extent to which working capital is blocked in  inventories.

(a) Inventory turnover

(b) Stock to working capital

(c) Stock velocity

(d) Debtors turnover ratio​

Solution,

Know that inventory turnover is the rate at which inventory the stock is sold, used and replaced; and is calculated by dividing the cost of goods by average inventory for the given period.

Hence, the correct option is (a) i.e. Inventory turnover.