Which of the Following Would Best Indicate That the Firm

question 45

Multiple Choice

Which of the following would best indicate that the firm is carrying excess inventory?

• A)A decline in sales
• B)A decline in the current ratio
• C)A decline in days' sales in inventory
• D)A stable current ratio with declining quick ratios
• E)A rise in total asset turnover

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Definitions:

Budget Period

The time frame for which a budget is planned and implemented, often one fiscal year.

One Month

A period of time extending roughly from a specific date in one calendar month to the corresponding date in the next calendar month.

One Year

A period consisting of 12 consecutive months or 365 days.

Budget Period

A specific time frame for which financial planning, expenditure, and allocations are made and tracked.