Asked by jesus salazar on May 31, 2024
Verified
All other things the same, purchasing inventory would decrease the inventory turnover ratio.
Inventory Turnover
A ratio showing how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.
- Acquire knowledge on the impact of inventory management upon financial ratios.
Verified Answer
AR
ashley reevesJun 06, 2024
Final Answer :
True
Explanation :
Purchasing additional inventory increases the average inventory held, which, if sales remain constant, would decrease the inventory turnover ratio by indicating a slower rate of inventory being sold or used.
Learning Objectives
- Acquire knowledge on the impact of inventory management upon financial ratios.
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