Which of the following is not associated with a high inventory turnover ratio?
A)A reduction in storage and obsolescence costs.
B)Relatively short time periods between inventory purchases and sales.
C)A drop in the demand for the company's products.
D)A reduction in borrowing to finance inventory purchases.

Question

Quizplus · Accepted Answer

The inventory turnover ratio measures the average number of times inventory purchased is sold during the period.High inventory turnover ratios indicate that goods are sold relatively quickly,resulting in lower storage and obsolescence costs along with less funds borrowed to finance inventory purchases.

Which of the Following Is Not Associated with a High