If cost of goods sold for the year was overstated, but all other financial statement items were properly reported, the calculated inventory turnover ratio would:

Question

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The inventory turnover ratio is calculated as Cost of Goods Sold divided by Average Inventory. If the Cost of Goods Sold is overstated, the ratio will be higher, indicating that inventory is being turned over more times than it actually is.

If Cost of Goods Sold for the Year Was Overstated