Asked by ALEXANDER STEPHAN MACHHOLZ on May 08, 2024
Verified
A high inventory turnover ratio indicates that minimal funds are tied up in inventory.
Inventory Turnover Ratio
A measure of how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.
- Identify the impact of inventory valuation methods on financial statements and business performance metrics such as gross profit and inventory turnover rate.
Verified Answer
KS
Katelynn SullawayMay 11, 2024
Final Answer :
True
Explanation :
A high inventory turnover ratio suggests that a company is efficiently managing its inventory, selling through its stock quickly, and therefore has less capital tied up in unsold goods.
Learning Objectives
- Identify the impact of inventory valuation methods on financial statements and business performance metrics such as gross profit and inventory turnover rate.
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