A high stockturn rate:
A) is only possible with a low markup percent.
B) is likely to result in low profits.
C) reduces the inventory investment and can improve profits.
D) increases the space needed for inventory.
E) None of the above is true.

Question

Quizplus · Accepted Answer

A high stockturn rate means products are selling quickly, which reduces the amount of time they spend sitting in inventory. This means less money is tied up in inventory and can be reinvested elsewhere. With a lower investment in inventory and faster cash flow, profitability can be improved. Therefore, a high stockturn rate reduces the inventory investment and can improve profits.

A High Stockturn Rate