In 20A,C Co

question 125

Multiple Choice

In 20A,C Co.had an inventory turnover ratio of 6.11 while P Co.had a ratio of 10.67.Which of the following might most accurately explain the difference in their ratios?

• A)C Co.had less inventory on hand in relation to their amount of cost of goods sold.
• B)C Co.has a lower sales figure so cost of goods sold is lower leading to a higher turnover ratio.
• C)C Co.takes a longer number of days to sell their inventory.
• D)C Co.has a poor credit rating.

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