Which of the following ratios would be most useful to obtain quantitative information on the company's inventory management processes?
A)activity ratio
B)profitability ratio
C)liquidity ratio
D)leverage ratio
E)solvency ratio

Question

Quizplus · Accepted Answer

Activity ratios, such as inventory turnover ratio and days inventory held ratio, provide quantitative information on a company's inventory management processes. These ratios indicate how efficiently the company is managing its inventory by measuring the time it takes to sell inventory and how often the inventory is being turned over. This information is important in determining if the company is effectively managing its inventory and if there are any areas for improvement.

Which of the Following Ratios Would Be Most Useful to Obtain