A company with a high inventory turnover requires a larger investment in inventory than another company of similar sales with a lower inventory turnover.A higher inventory turnover suggests a smaller investment in inventory is required.

Question

Quizplus · Accepted Answer

A higher inventory turnover suggests that the company is selling its inventory quickly, which means it requires a smaller investment in inventory. A company with a lower inventory turnover may be holding onto their inventory for longer, hence requiring a larger investment in inventory.

A Company with a High Inventory Turnover Requires a Larger