Short-Term Creditors Are Likely to View a Higher-Than-Average Inventory Turnover

question 102

Multiple Choice

Short-term creditors are likely to view a higher-than-average inventory turnover rate as indicating that:

• A)A company is in financial difficulty.
• B)The company is able to sell its inventory quickly.
• C)The company probably has an excessive amount of inventory.
• D)The company has a longer-than-average operating cycle.

---

Definitions:

Uniform Distribution

A type of probability distribution where all outcomes are equally likely to occur within a certain range.

Continuous Uniform

A distribution that assigns an equal probability to all outcomes in a continuous range.

Random Variable

A variable whose possible values are outcomes of a statistical experiment, where the value is determined by chance.

Probability Density Function

A function that describes the relative likelihood for a continuous random variable to take on a given value.