Which of the Following Statements Is Correct

question 18

Multiple Choice

Which of the following statements is correct?

• A) An expense to sales ratio of 10% in year 1 and 15% in year 2 indicates that management policies to control expenses have been successful.
• B) In general, the faster the turnover of inventory the lower the profitability of the business.
• C) A gross profit ratio that is increasing over time indicates an increase in the margin between the purchase price and the selling price of goods.
• D) The formula for the inventory turnover ratio is sales divided by average inventory.