Thyme,Inc'S Inventory Turnover Ratio Has Been Approximately 6 Times Per

question 147

Multiple Choice

Thyme,Inc.'s inventory turnover ratio has been approximately 6 times per year over the past few years.This year Thyme decided to reduce the amount of inventory it keeps on hand.What effect will this new policy have on its inventory turnover ratio for the current year?

• A)The ratio will increase.
• B)The ratio will decrease.
• C)The inventory turnover ratio will stay the same.
• D)This is a trick question.The amount of inventory on hand has nothing to do with a company's inventory turnover ratio.

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Definitions:

Alternative

A distinct option or choice among multiple possibilities.

Conscious Reasoning

The deliberate use of logic and rational thinking in making decisions or solving problems, typically involving awareness and reflective thought.

Intuition

The skill to comprehend or perceive something right away, bypassing the process of conscious deliberation.

Problem

is a situation, question, or issue that is difficult to understand or deal with, often requiring analysis and solution.