Too much inventory on hand
A) reduces solvency
B) increases the cost to safeguard the assets
C) increases the losses due to price declines
D) all of the above

Question

Quizplus · Accepted Answer

Too much inventory on hand can have a negative impact on a company's solvency as it ties up cash that could be used for other purposes. Additionally, excess inventory increases the cost to safeguard the assets, including storage, insurance, and security costs. Finally, too much inventory can result in losses due to price declines or obsolescence, further reducing the company's financial health.

Too Much Inventory on Hand