Firms that successfully increase their rates of inventory turnover will, among other things,
A)be able to reduce their borrowing needs.
B)be able to reduce their dividend payments to stockholders.
C)find it more difficult to be given credit by their resource suppliers.
D)have a greater need for high balances in their cash accounts.

Question

Quizplus · Accepted Answer

Firms that increase their rates of inventory turnover are often able to reduce their borrowing needs since they are able to generate cash more quickly from selling their inventory. This means they have more cash on hand to fund their operations and invest in other opportunities without relying on external financing or borrowing.

Firms That Successfully Increase Their Rates of Inventory Turnover Will