Assessing a company's inventory turnover helps assess the
A)effectiveness of a company's collection activities.
B)ability to measure the quality of the inventory on hand.
C)speed at which inventories move through operations.
D)efficiency of a company.

Question

Quizplus · Accepted Answer

Inventory turnover measures the speed at which inventories move through operations, indicating the efficiency of a company's operations. A high inventory turnover ratio is generally desirable as it suggests that a company is effectively managing its inventory and not holding onto excess inventory that could become obsolete or spoil. A low inventory turnover ratio may indicate that a company is not effectively managing its inventory or may have an overabundance of slow-moving or obsolete inventory. The inventory turnover ratio is not directly related to a company's collection activities or the quality of its inventory.

Assessing a Company's Inventory Turnover Helps Assess the