A Low Inventory Turnover Ratio Might Indicate That

question 41

Multiple Choice

A low inventory turnover ratio might indicate that:

• A)the firm is using the last-in first-out (LIFO) method of inventory valuation during inflationary periods.
• B)the cost of inventory of the firm is lower than that of the similar firms.
• C)the firm is holding excess stocks of inventory.
• D)the inventory of the firm is sold and restocked very often.
• E)the firm purchases all its inventory on credit.

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