The Corner Hardware Has Succeeded in Increasing the Amount of Goods

question 59

Multiple Choice

The Corner Hardware has succeeded in increasing the amount of goods it sells while holding the amount of inventory on hand at a constant level.Assume that both the cost per unit and the selling price per unit also remained constant.This accomplishment will be reflected in the firm's financial ratios in which one of the following ways?

• A)decrease in the inventory turnover rate
• B)decrease in the net working capital turnover rate
• C)no change in the fixed asset turnover rate
• D)decrease in the day's sales in inventory
• E)no change in the total asset turnover rate

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Definitions:

Regulators

Government or independent authorities responsible for supervising and enforcing laws within certain industries.

Lenders

Entities that provide funds to others with the expectation of repayment plus interest.

Shareholders

Individuals or entities that own one or more shares of stock in a public or private corporation, thus having a claim to a part of the company's assets and earnings.

Risk

The possibility of loss or injury, or the variability of returns associated with a given investment or financial activity.