Which of these indicates that a firm is efficient?
A) A high average collection period
B) A high day's sales in inventories
C) A low asset turnover
D) A high inventory turnover

Question

Quizplus · Accepted Answer

A high inventory turnover indicates that the firm is efficiently managing its inventory, which is a key component of its operations. It means that the firm is selling its inventory quickly, which frees up cash and ensures that the inventory is not becoming outdated or obsolete. Higher inventory turnover rates are generally associated with better managed firms.

Which of These Indicates That a Firm Is Efficient