The sales of SportCheck have increased recently and inventory has declined slightly. A financial analyst would expect to find that the:
A) Inventory turnover has increased and the days' sales in inventory has decreased.
B) Inventory turnover has decreased and the days' sales in inventory has decreased.
C) Inventory turnover has decreased and the days' sales in inventory has increased.
D) Inventory turnover has increased and the days' sales in inventory has increased.
E) Quick ratio has decreased and the current ratio has increased.

Question

Quizplus · Accepted Answer

Inventory turnover increases when sales increase and inventory decreases, indicating that the company is selling its inventory more quickly. Days' sales in inventory decreases when inventory turnover increases, as it takes less time to sell the inventory.

The Sales of SportCheck Have Increased Recently and Inventory Has