Question

32. A low inventory turnover means :
(A) Investment tied up in stocks
(B) Obsolete goods on hand
(C) Adverse impact on liquidity
(D) all of these​

Answer 1

Answer:

A low turnover implies weak sales and possibly excess inventory, also known as overstocking. It may indicate a problem with the goods being offered for sale or be a result of too little marketing. A high ratio implies either strong sales or insufficient inventory

Answer 2

Concept: A low turnover implies weak sales and probably excess inventory, conjointly called overstocking. it's going to indicate a haul with the products being offered available or be a results of deficient selling.

Find: Choose the correct option which shows the meaning of inventory turnover.

Solution: Low inventory turnover means average inventory may be a higher % of sales. It can also indicate that the company's revenues weren't as high for sure. corporations like to not have higher average inventories as a result of those assets can be used elsewhere.

Inventory Turnover = Revenue / Average Inventory.

Final answer: B) Obsolete goods on hand.

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