A company with a high inventory turnover requires a smaller investment in inventory than one producing the same sales with a lower turnover.

Question

Quizplus · Accepted Answer

This is because a high inventory turnover indicates that the company is selling its inventory quickly and efficiently, resulting in a smaller amount of inventory being held at any given time. In contrast, a lower inventory turnover indicates that the company is holding onto its inventory for longer periods of time, which requires a larger investment in inventory.

A Company with a High Inventory Turnover Requires a Smaller