In Comparison of 2010 to 2009 Performance,Watson Company's Inventory Turnover

question 43

Essay

In comparison of 2010 to 2009 performance,Watson Company's inventory turnover decreased substantially,although sales and inventory amounts were essentially unchanged.
Required:
During a corporate meeting you heard the following managers postulate why the decreased inventory turnover ratio happened.Which statement best explains the decreased inventory turnover ratio and why?
a.The marketing manager said: The decreased inventory turnover ratio is due to an increase in the cost of goods sold.
b.The operations manager said: The decreased inventory turnover ratio is due to increased gross profit percentage.
c.The credit manager said: The decreased inventory turnover ratio is due to a decrease in the accounts receivable turnover.
d.The shipping manager said: The decreased inventory turnover ratio is due to decreased total asset turnover.

---

Definitions:

Umbilical Cord

Cord connecting the fetus to the placenta, through which blood vessels pass.

Umbilical Arteries

Blood vessels that carry deoxygenated blood from a fetus to the placenta during pregnancy.

Blood Vessels

Blood vessels are tubular structures that carry blood throughout the body, including arteries, veins, and capillaries, each serving distinct functions in the circulatory system.

Gametes

Reproductive cells (sperm in males and eggs in females) that fuse during fertilization to form a new organism with a complete set of genes.