Which of the Following Would Best Indicate That the Firm

question 8

Multiple Choice

Which of the following would best indicate that the firm is carrying excess inventory?

• A) a decline in sales
• B) a decline in the current ratio
• C) a decline in days' sales in inventory
• D) stable current ratio with declining quick ratios
• E) a rise in total asset turnover

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Definitions:

Exchange Rate

The price of one country's currency expressed in another country's currency.

Spot Rate

The current market price at which a particular asset can be bought or sold for immediate delivery.

Closing Rate

The spot exchange rate at the end of the reporting period.

Functional Currency

The currency of the primary economic environment in which an entity operates, typically used in its financial reporting.