When Tri-C Corp.compares its ratios to industry averages,it has a higher current ratio,an average quick ratio,and a low inventory turnover.What might you assume about Tri-C?

Question

Quizplus · Accepted Answer

The fact that Tri-C Corp. has a higher current ratio and an average quick ratio suggests that it has a relatively high level of current assets, including inventory. The low inventory turnover ratio indicates that the company may not be selling its inventory as quickly as its industry peers, which could be due to excessive inventory levels or slow sales. Therefore, it is safe to assume that the company's average inventory is too high.