The Inventory Turnover and Current Ratio Are Related

question 82

True/False

The inventory turnover and current ratio are related.The combination of a high current ratio and a low inventory turnover ratio, relative to industry norms, suggests that the firm has an above-average inventory level and/or that part of the inventory is obsolete or damaged.

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Definitions:

Groupitis

A derogatory term referring to the overemphasis on team or group work, sometimes at the expense of individual contributions or efficiency.

Customer Structure

An organization structure that groups together people and jobs that serve the same customers or clients.

Consumer Products Industry

The sector of the economy that manufactures and sells goods used by the general public, ranging from food and beverages to electronics and household items.

Geographical Structures

Organizational structures that group activities based on geographical regions or territories.