It is more useful to compare a company's inventory turnover with its own results from prior periods than with the results of other companies:
A)because companies may use different accounting methods which may cause the turnovers to vary significantly.
B)because larger companies' ratios are not comparable with smaller companies' ratios.
C)on extremely rare occasions.Little information can be gleaned from comparing a company's current and prior period results.
D)because knowing the results of other companies does not help you manage or evaluate the company in which you are interested.

Question

Quizplus · Accepted Answer

With inventory turnover ratios varying between industries and companies,it's most useful to compare a company's turnover with its own results from prior periods.

It Is More Useful to Compare a Company's Inventory Turnover