Interpretation of Inventory Ratios

question 135

Essay

Interpretation of inventory ratios
Explain the meaning of inventory turnover and average days to sell inventory. What do these ratios say about the company's performance? What additional information would you require to improve your assessment?

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Definitions:

Lower Two Quintiles

Refers to the bottom 40% of a population when it is divided into five equal groups according to income levels.

Income Earned

The total amount of money received by an individual or a business in exchange for labor or the provision of services during a certain period.

Black Children

A term referring to children of African or African American descent.

Under 18

Refers to individuals who have not yet reached the legal age of adulthood, which is often defined as 18 years in many jurisdictions.