An analyst is comparing two companies, a retail bookstore chain and an on-line bookstore. Which of the following activity ratios is most likely significantly higher for the on-line bookstore?
A) accounts receivable turnover
B) inventory turnover
C) accounts payable turnover
D) gross margin

Question

Quizplus · Accepted Answer

Online bookstores typically have higher inventory turnover because they can manage inventory more efficiently, often using just-in-time inventory systems and having lower physical inventory requirements compared to retail chains.

An Analyst Is Comparing Two Companies, a Retail Bookstore Chain