A Lower Days' Sales in Inventory for Company X When

question 33

Multiple Choice

A lower days' sales in inventory for Company X when compared to other companies, indicates that Company X:

• A)is able to sell its inventory quickly.
• B)is spending more on inventory storage.
• C)is incurring higher insurance costs.
• D)is holding excess obsolete inventory.

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Definitions:

Cost Components

The individual elements that contribute to the total cost of a product or service, including materials, labor, and overhead.

Fiberglass Boat

A type of boat made from fiberglass, known for its durability, strength, and lightweight compared to traditional wooden boats.

Ratio

The quantitative relation between two amounts showing the number of times one value contains or is contained within the other.

Preferred Equity

A type of equity which is ranked higher than common stock and usually has fixed dividend payments.