An Indication That Inventory Is Being Sold Quickly Is

question 104

Multiple Choice

An indication that inventory is being sold quickly is:

• A)a high turnover rate and high days-sales-in-inventory rate.
• B)a high turnover rate and low days-sales-in-inventory rate.
• C)a low turnover rate and high days-sales-in-inventory rate.
• D)a low turnover rate and low days-sales-in-inventory rate.

---

Definitions:

Equity Financing

The process of raising capital through the sale of shares in a company, leading to share ownership by investors.

Vertical Analysis

A financial analysis method that represents each item in a financial statement as a percentage of a base figure, enabling comparison and assessment of financial health over different periods.

Trend Analysis

A type of horizontal analysis that deals with percentage changes in items on the financial reports for several years. This analysis uses a base year to calculate the percentage change of each item.

Gross Profit

The financial metric representing the difference between revenue and the cost of goods sold, before accounting for other expenses.