How Would You Interpret an Inventory Turnover Ratio of 10

question 10

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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