Which of the Following Statements Is CORRECT

question 51

Multiple Choice

Which of the following statements is CORRECT?

• A)A reduction in inventories would have no effect on the current ratio.
• B)An increase in inventories would have no effect on the current ratio.
• C)If a firm increases its sales while holding its inventories constant, then, other things held constant, its inventory turnover ratio will increase.
• D)A reduction in the inventory turnover ratio will generally lead to an increase in the ROE.
• E)If a firm increases its sales while holding its inventories constant, then, other things held constant, its fixed assets turnover ratio will decline.

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Definitions:

Benefits Unimportant

A perspective or situation where the advantages or positive outcomes of a product or service are undervalued or ignored by the customer or client.

Memorized Sales Presentation

A method of selling in which the sales pitch is precisely scripted for the salesperson.

Telephone Selling

The process of engaging potential customers through phone calls with the aim of promoting products or services and securing sales.

Core Principles

Fundamental beliefs or values that serve as the foundation for an organization, individual's actions, or the functioning of a system.