Indicate Whether Each of the Following Statements About Financial Statement

question 104

Short Answer

Indicate whether each of the following statements about financial statement analysis is true or false.
1. Having too little inventory can hurt a company's profitability because of lost sales.
2. Having too much inventory can hurt a company's profitability because of excess costs.
3. Generally, a lower inventory turnover indicates that merchandise is being handled more efficiently.
4. Average days to sell inventory is the number of times, on average, that inventory is replaced during the year.
5. Values for the inventory turnover ratio vary widely among different industries.

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Definitions:

Edema

The accumulation of fluid in body tissues, leading to swelling.

Sequential Compression Device

A medical device used to promote blood circulation in the limbs by applying sequential pressure, often used to prevent deep vein thrombosis.

Compression Stocking

A specialized hosiery designed to improve blood circulation and prevent the occurrence of, or guard against further progression of, venous disorders.

Pneumatic Compression

A therapy technique involving air-filled devices that wrap around limbs to enhance blood flow and reduce swelling.