Although the inventory turnover ratio is an important analytical tool for many companies, it would be most crucial for a company that
A) provides legal services.
B) sells cell phones and electronic organizers.
C) manufactures steel.
D) sells paint.

Question

Quizplus · Accepted Answer

The inventory turnover ratio is most crucial for companies that sell physical products, especially those with a short shelf life or rapid changes in technology, such as cell phones and electronic organizers. This ratio helps measure the efficiency of inventory management, the popularity of products, and the overall health of a company's sales. The other options, such as providing legal services or manufacturing steel, do not involve the same level of inventory management and turnover as selling physical products.

Although the Inventory Turnover Ratio Is an Important Analytical Tool