If the inventory turnover ratio has decreased from past,it means that:
A) Inventory is growing.
B) Sales are dropping.
C) Inventory is growing or sales are dropping.
D)None of the above.
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Answer:
(c) is the answer
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Concept: The inventory turnover ratio may be a measure of what number times the inventory is sold and replaced over a given period. Inventory Turnover Ratio = Cost of products Sold / Avg. Inventory.
Find: Choose an appropriate option from the given options.
Solution: When a company's inventory turnover is decreasing, it means it's holding its inventory longer than previously measured time periods. The measure of how long an organization holds its inventory before selling it's said because the inventory turnover ratio.Stocking giant numbers of slow, high value things can lower your inventory turnover magnitude relation. Final answer: C) Inventory is growing or sales square measure dropping.
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