Assume Taylor & Sons Cabinet Makers has an inventory turnover ratio of 4.5 for the year ended November 30,2011.Which statement below is the best interpretation of the ratio?
A) The company was able to sell the inventory 4.5 times faster than last year.
B) The company has 4.5 times as much inventory as it has current liabilities.
C) The company sells its average inventory balance 4.5 times per year.
D) The company sells its inventory at a greater rate than other companies in its industry.
Correct Answer:
Verified
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