Which of the following might be an indication that a company has more obsolete ("out of date") products than it did in the previous year?
A) The number of days of inventory on hand is decreasing.
B) The inventory turnover ratio is increasing.
C) The inventory turnover ratio is decreasing.
D) None of the above

Question

Quizplus · Accepted Answer

A decreasing inventory turnover ratio suggests that the company is selling fewer products relative to the amount of inventory held, which could be an indication that there are more obsolete products in inventory that are not selling. The number of days of inventory on hand and the inventory turnover ratio are not necessarily indicative of the age or obsolescence of the products in inventory.

Which of the Following Might Be an Indication That a Company