At Chips and Dips, a local convenience market, what would an increase in the inventory turnover ratio indicate?
A) It is at risk of holding too much inventory.
B) It is more likely to face a cash flow problem.
C) It is selling its stock of merchandise more quickly.
D) It is relying heavily on credit sales.

Question

Quizplus · Accepted Answer

An increase in the inventory turnover ratio means that the company is selling its inventory more quickly, which is a positive sign. It indicates that the company is effectively managing its inventory and is not at risk of holding too much inventory, facing cash flow problems or relying heavily on credit sales.

At Chips and Dips, a Local Convenience Market, What Would