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