The lower the inventory turnover ratio,the more efficiently the company manages its inventory,all other things being equal.

Question

Quizplus · Accepted Answer

The statement is incorrect. The higher the inventory turnover ratio, the more efficiently the company is managing its inventory, as it indicates that the company is selling its inventory quickly and efficiently. A lower inventory turnover ratio indicates that the company is holding onto inventory for a longer period, which may be a sign of poor inventory management.

The Lower the Inventory Turnover Ratio,the More Efficiently the Company