How Would You Interpret an Inventory Turnover Ratio of 10

question 85

Multiple Choice

How would you interpret an inventory turnover ratio of 10.7?

• A)it takes 50 days on average to collect receivables.
• B)inventory is converted into sales every 50 days.
• C)the firm has sufficient inventories to maintain sales for 34.1 days.
• D)assets are converted into sales every 50 days.

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Definitions:

Psychological Process

The mental functions and actions by which an individual perceives, thinks, feels, and behaves.

Uncertainty

A state of having limited knowledge where it is impossible to exactly describe the existing state, future outcome, or more than one possible outcome.

Critical Thinking Skill

The intellectual ability to analyze information, evaluate evidence, and understand arguments independently and thoughtfully.

Dominance Structuring

The organization or arrangement of elements within a system that establishes a hierarchy of control or influence.