An increasing inventory turnover ratio indicates:
A) a longer time span between the ordering and receiving of inventory.
B) a shorter time span between the ordering and receiving of inventory.
C) a shorter time span between the purchase and sale of inventory.
D) a longer time span between the purchase and sale of inventory.

Question

Quizplus · Accepted Answer

An increasing inventory turnover ratio indicates that the company is selling its inventory more frequently in a given time period. This means that the time span between the purchase and sale of inventory is shorter, leading to a higher turnover ratio.

An Increasing Inventory Turnover Ratio Indicates