The Operations Manager at a Lumber Supply Company Is Analyzing

question 6

Multiple Choice

The operations manager at a lumber supply company is analyzing how well his company is using its resources. He knows that sales for the past year were $3.5 million. He also knows that he had $850,000 in inventory twelve months ago, and he currently has $550,000. What important ratio can he calculate from this information?

• A) He can determine that his inventory turnover is 5.
• B) He can determine that his inventory turnover is 11.6.
• C) He can determine that his net profit margin is 20%.
• D) He can determine that his accounts receivable turnover is 20%.

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