Umbero Nix, a garment manufacturing company, produces twenty thousand units of sweaters. These units are sold within three months and replenished with another twenty thousand units. In one year, Umbero Nix replaces its inventory of sweaters four times over. Umbero Nix most likely analyzes _____ to measure how many times its inventory is sold and replaced each year.
A) capital budgeting ratios
B) profitability ratios
C) leverage ratios
D) asset management ratios

Question

Quizplus · Accepted Answer

Asset management ratios, specifically inventory turnover ratio, measure how efficiently a company manages its inventory by indicating how many times inventory is sold and replaced over a period.

Umbero Nix, a Garment Manufacturing Company, Produces Twenty Thousand Units