The Lower the Inventory Turnover Ratio,the More Efficiently the Company

question 117

True/False

The lower the inventory turnover ratio,the more efficiently the company manages its inventory,all other things equal.

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Definitions:

Rate of Return

The positive or negative return on an investment during a designated period, stated in terms of a percentage of the original investment's expense.

Invest

The act of allocating resources, usually money, in the expectation of generating an income or profit.

Discount Rate

A percentage used to calculate the present value of future cash flows or investments.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, discounting future amounts to their present values.