A high rate of inventory turnover indicates which of the following?
A)The firm is experiencing a rapid decline in inventory levels.
B)The firm is losing inventory to errors in recording.
C)The firm has a high Gross profit percentage.
D)The firm sells its inventory rapidly.

Question

Quizplus · Accepted Answer

A high rate of inventory turnover indicates that the firm is selling its inventory rapidly, which is generally seen as positive as it suggests strong demand for the company's products. A low rate of inventory turnover, on the other hand, can indicate weak demand or an excessive amount of inventory on hand.

A High Rate of Inventory Turnover Indicates Which of the Following