Danielle Jarrett is the owner of Designer Boutique. Her store has an inventory turnover ratio of about 10 (unusually high for this type of business). Which of the following statements is not true?

Question

Quizplus · Accepted Answer

A high inventory turnover ratio, like 10, indicates that the business is selling its inventory quickly and efficiently, which means less money is tied up in inventory and potentially more resources can be allocated elsewhere. However, the statement in D is incorrect because the inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period, not the ratio of sales to total assets.

Danielle Jarrett Is the Owner of Designer Boutique