Which of the following would best indicate that the firm is carrying excess inventory?
A)A decline in sales
B)A decline in the current ratio
C)A decline in days' sales in inventory
D)A stable current ratio with declining quick ratios
E)A rise in total asset turnover

Question

Quizplus · Accepted Answer

A stable current ratio with declining quick ratios indicates that the firm is carrying excess inventory because the quick ratio excludes inventory from current assets, suggesting that an increasing proportion of the firm's assets is tied up in inventory.

Which of the Following Would Best Indicate That the Firm