Inventory Turnover Indicates How

question 49

Multiple Choice

Inventory turnover indicates how:

• A)quickly inventory is received from the supplier after the order is placed.
• B)many days it takes the inventory to travel between the seller's warehouse and the buyer's warehouse.
• C)rapidly inventory is sold.
• D)many days it takes from the time an order is received to the day it is shipped.

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Definitions:

Fixed Asset Turnover Ratio

A financial indicator that measures a company's ability to generate net sales from fixed-asset investments, specifically property, plant, and equipment.

Financial Statements

Official documentation detailing the financial transactions and status of an entity, such as a company or individual, usually comprising a balance sheet, income statement, and statement of cash flows.

Common Shares

A type of equity ownership in a corporation, where holders have voting rights and potential dividends, but come after preferred shareholders in bankruptcy or liquidation.

FIFO

First-In, First-Out, an accounting method for valuing the cost of goods sold that assumes the first items placed in inventory are sold first.