A firm that is efficient in inventory management will have
A) a high inventory turnover ratio and a low days sales in inventory ratio.
B) a low inventory turnover ratio and a low days sales in inventory ratio.
C) a high inventory turnover ratio and a high days sales in inventory ratio.
D) a low inventory turnover ratio and a high days sales in inventory ratio.

Question

Quizplus · Accepted Answer

A high inventory turnover ratio indicates that a firm is selling its inventory quickly, and a low days sales in inventory ratio means it takes fewer days to sell the inventory. Both are signs of efficient inventory management.

A Firm That Is Efficient in Inventory Management Will Have