If a firm has been experiencing increased sales while its inventory levels have decreased,then

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If a firm is experiencing increased sales while its inventory levels are decreasing, then the inventory turnover ratio would be increasing. Inventory turnover measures how many times a company sells and replaces its inventory in a given period. A higher inventory turnover ratio indicates that the company is able to sell its inventory faster, which is a good sign. Additionally, as inventory levels are decreasing, the average age of inventory would also be decreasing. A lower average age of inventory means that the company is able to sell its goods faster, which is another positive sign. Therefore, the correct choice is D, its inventory turnover is increasing and its average age of inventory is decreasing.

If a Firm Has Been Experiencing Increased Sales While Its