Which of the following factors might suggest that a company is having difficulty selling its inventory?
A) An increase in receivables
B) A buildup of inventory balances
C) An increase in total debt
D) An increase in interest expense

Question

Quizplus · Accepted Answer

A buildup of inventory balances suggests that the company is not selling its inventory at a rate fast enough to keep up with the rate of inventory purchases. This can lead to increased storage and holding costs, as well as potential obsolescence or spoilage issues. An increase in receivables may suggest that customers are not paying their bills on time, but this does not necessarily indicate difficulty in selling inventory. Increases in total debt and interest expense may suggest financial difficulties, but do not necessarily provide direct evidence of inventory selling issues.

Which of the Following Factors Might Suggest That a Company