Selected Data from the Financial Statements Are Provided Below

question 138

Multiple Choice

Selected data from the financial statements are provided below:

-Refer to Rainsoft Company. Assume that competitors in the industry have an average inventory turnover ratio of 20.8 times in 2021. Rainsoft's inventory turnover ratio for 2021 indicates that the company

• A)has too little inventory on hand at the end of 2021.
• B)is pricing its products too low.
• C)is selling its inventory much more quickly than the industry average.
• D)may have obsolete inventory or problems with sales.

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Definitions:

Supply

The total amount of a specific good or service that is available to consumers, often influenced by the product's price.

Demand

The desire, willingness, and ability of consumers to buy goods and services at various price points at a specific time.

Tax

A compulsory financial charge imposed by a government on individuals or entities to fund public expenditures.

Cigarette Sellers

Businesses or individuals involved in the sale of cigarettes, a consumer product made from tobacco and sold for smoking.