Analysts and creditors watch the inventory turnover ratio because a sudden decline in this ratio may mean that a company is facing an unexpected decline in demand for its products or is becoming sloppy in its production management.

Question

Quizplus · Accepted Answer

This statement accurately reflects the importance of the inventory turnover ratio to analysts and creditors, as a decline in the ratio could indicate issues with demand or production management.

Analysts and Creditors Watch the Inventory Turnover Ratio Because a Sudden