Smith Company has a low number of days in inventory. This indicates that:
A)their inventory sales are producing low profits.
B)the firm has a low Gross profit percentage.
C)the cost of inventory is very high.
D)their inventory is turning over rapidly.

Question

Quizplus · Accepted Answer

A low number of days in inventory indicates that the company is efficiently managing its inventory, meaning it is selling and replacing its stock quickly, which is referred to as rapid inventory turnover.

Smith Company Has a Low Number of Days in Inventory