The higher the inventory turnover measure, the:
A) Faster a ﬁrm sells its inventory.
B) Faster a ﬁrm collects payment on its sales.
C) Longer it takes a ﬁrm to sell its inventory.
D) Greater the amount of inventory held by a ﬁrm.
E) Lesser the amount of inventory held by a ﬁrm.

Question

Quizplus · Accepted Answer

The higher the inventory turnover measure, the faster a firm sells its inventory. This means that the firm is able to quickly sell its inventory and generate revenue, which is a positive indicator of the firm's financial health.

The Higher the Inventory Turnover Measure, The