Which of These Would Cause the Inventory Turnover Ratio to Increase

question 151

Multiple Choice

Which of these would cause the inventory turnover ratio to increase the most?

• A)Increasing the amount of inventory on hand.
• B)Keeping the amount of inventory on hand constant but increasing sales.
• C)Keeping the amount of inventory on hand constant but decreasing sales.
• D)Decreasing the amount of inventory on hand and increasing sales.

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Definitions:

Realized Gain

The profit earned from the sale of an asset, which has been converted from an unrealized gain into cash or an equivalent.

Available-For-Sale

A classification for securities that are not held to maturity or for trading purposes, with unrealized gains or losses reported in equity.