If cost of goods sold remains unchanged,an increase in the inventory turnover ratio is indicative of a(n):
A)reduction in the cost of goods sold.
B)decrease in inventory.
C)increase in inventory.
D)increase in sales revenue.

Question

Quizplus · Accepted Answer

Inventory turnover = Cost of goods sold ÷ Average inventory
If cost of goods sold remains unchanged,a decrease in inventory will result in an increase in the inventory turnover ratio.

If Cost of Goods Sold Remains Unchanged,an Increase in the Inventory