A company with a low inventory turnover requires a smaller investment in inventory than one producing the same sales with a higher turnover.

Question

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A company with a low inventory turnover requires a larger investment in inventory than one producing the same sales with a higher turnover. This is because a low inventory turnover indicates that the company is holding onto their inventory for a longer period of time, tying up their cash flow and increasing storage and handling costs. On the other hand, a higher inventory turnover means the company is selling their inventory faster, allowing them to invest in more inventory to keep up with demand.

A Company with a Low Inventory Turnover Requires a Smaller