An Inventory Turnover Ratio

question 63

Multiple Choice

An inventory turnover ratio

• A)measures the number of times, on average, the inventory was sold during the period.
• B)is a measure of solvency that focuses on efficient use of inventory.
• C)that is significantly lower than the industry average usually indicates difficulty with selling that inventory and the likelihood of incurring lower than average storage costs.
• D)that is significantly higher than the industry average may indicate that a company is maintaining inventory levels that are too high.