Asked by Daniel Juarez on Jun 22, 2024
Verified
In comparison of 2014 to 2013 performance,Weir Company's inventory turnover decreased substantially,although sales and inventory amounts were essentially unchanged.
Required:
Which of the following statements best explains the decreased inventory turnover ratio? Explain your answer choice.
a.Cost of goods sold increased.
b.Gross profit percentage increased.
c.Accounts receivable turnover decreased.
d.Total asset turnover decreased.
Inventory Turnover
A financial ratio that measures how quickly a company sells and replaces its stock of goods within a given period.
Cost Of Goods Sold
Represents the direct expenses related to the production of goods sold by a company, including materials and labor costs.
Gross Profit Percentage
A financial metric that represents the gross profit as a percentage of net sales, indicating the efficiency of a company's production process.
- Explore the implications of changes in financial ratios over time and interpret what these changes indicate about a company's operational efficiency and financial health.
Verified Answer
Learning Objectives
- Explore the implications of changes in financial ratios over time and interpret what these changes indicate about a company's operational efficiency and financial health.
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