Consider the Following Inventory Data for Two Companies Which of These Companies Had the Higher Inventory Turnover Ratio

question 134

Multiple Choice

Consider the following inventory data for two companies: $\begin{array} { r r r } &\text {Nichols, Inc.}&\text { Winters, Inc.}\\\text {Beginning inventory}&\$ 120,000 & \$ 150,000 \\ \text{Ending inventory}&80,000 & 100,000 \\ \text {Purchases}&240,000 & 310,000 \end{array}$ Which of these companies had the higher inventory turnover ratio?

• A) Nichols.
• B) Winters.
• C) The ratios are the same for both companies.
• D) Cannot determine with the information given.

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Definitions:

Paid-In Capital

The total amount of capital that shareholders have directly contributed to a company through the purchase of its shares.

Shares of Par

Units of ownership in a corporation at the nominal or face value defined in the corporate charter, typically used in the context of par value shares.

National Securities

Financial instruments issued by a government to finance its activities, often including bonds and treasury notes.

Publicly Held

A business with securities traded on public markets, allowing for public investment.