A comparison of the current year's inventory turnover ratio with that of previous years may indicate the presence of obsolete inventory.

Name: A comparison of the current year's inventory turnover ratio with that of previous years may indicate the presence of obsolete inventory.
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Question

Quizplus · Accepted Answer

If the inventory turnover ratio has decreased significantly from previous years, it may indicate that there is obsolete inventory that is not being sold and that should be identified and possibly disposed of.

A Comparison of the Current Year's Inventory Turnover Ratio with That