Steve's Shelving and Storage has a high inventory turnover ratio because Steve frequently sells and replaces his inventory over the course of a year. What might this scenario indicate?

Question

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Inventory turnover, sales divided by total inventory, indicates how many times a firm sells and replaces its inventory over the course of a year. A high inventory turnover rate may indicate great efficiency but may also suggest the possibility of lost sales due to insufficient stock levels.

Steve's Shelving and Storage Has a High Inventory Turnover Ratio