Which of the Following Statements Is CORRECT

question 15

Multiple Choice

Which of the following statements is CORRECT?

• A)A decline in a firm's inventory turnover ratio suggests that it is improving both its inventory management and its liquidity position, i.e., that it is becoming more liquid.
• B)In general, it's better to have a low inventory turnover ratio than a high one, as a low one indicates that the firm has an adequate stock of inventory relative to sales and thus will not lose sales as a result of running out of stock.
• C)If a firm's fixed assets turnover ratio is significantly lower than its industry average, this could indicate that it uses its fixed assets very efficiently or is operating at over capacity and should probably add fixed assets.
• D)The more conservative a firm's management is, the higher its total debt to total capital ratio is likely to be.
• E)The days sales outstanding ratio tells us how long it takes, on average, to collect after a sale is made. The DSO can be compared with the firm's credit terms to get an idea of whether customers are paying on time.

---

Definitions:

Successful Negotiations

The process where two or more parties reach a mutually beneficial agreement through dialogue and compromise.

Sharing

The act of giving a portion of what one has to others or allowing others to use something jointly, often seen as a social or collaborative activity.

Communication

The process of exchanging information, ideas, thoughts, and feelings between people through speaking, writing, or using some other medium.

Transferring Information

The act of conveying data, knowledge, or details from one entity or person to another.