In considering the purchase of a business,a very high inventory turnover may indicate that a large proportion of stock is not saleable.

Question

Quizplus · Accepted Answer

A high inventory turnover generally indicates that the business is efficiently selling its stock and replenishing it regularly. A low inventory turnover may indicate that the business is struggling to sell its stock and may have a large proportion of unsaleable items.

In Considering the Purchase of a Business,a Very High Inventory