Which of the Statements Below Is TRUE

question 34

Multiple Choice

Which of the statements below is TRUE?

• A)Inventory turnover is cost of goods sold divided by accounts receivables.
• B)Receivables turnover is accounts receivable divided by sales.
• C)Total asset turnover is profits divided by total assets.
• D)A higher inventory turnover ratio signifies that inventory is moving faster.

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Definitions:

Nondiversifiable Risk

The portion of an investment's risk that cannot be eliminated through diversification, often associated with market-wide risks.

Systematic Risk

The danger that affects the whole market or a part of the market, which cannot be reduced by diversifying investments.

Unique Risk

A risk that affects a very small number of assets, also known as unsystematic risk, specific risk, or idiosyncratic risk, and can be largely eliminated by diversification.

Market Risk

The risk of losses in investments due to factors that affect the overall performance of the financial markets, including economic, political, and geopolitical events.