In general, it's better to have a low inventory turnover ratio than a high one, as a low ratio indicates that the firm has an adequate stock of inventory relative to sales and thus will not lose sales as a result of running out of stock.

a. True

b. False

Question

Business

Janelle Kelley

19 September, 23:00

In general, it's better to have a low inventory turnover ratio than a high one, as a low ratio indicates that the firm has an adequate stock of inventory relative to sales and thus will not lose sales as a result of running out of stock.

a. True

b. False

+2

Answers (1)

Know the Answer?

Gerald Leonard · Answer 1

b. False

Explanation:

Inventory Turnover tells us how fast the business is selling it's product. It measure the number of time an average inventory is completed its process from finished goods / Inventory to sales to customer. Higher the inventory turnover lower time of holding the inventory of each unit. So, the statement given is false.

In general, it's better to have a low inventory turnover ratio than a high one, as a low ratio indicates that the firm has an adequate stock of inventory relative to sales and thus will not lose sales as a result of running out of stock.a. Trueb. False

In general, it's better to have a low inventory turnover ratio than a high one, as a low ratio indicates that the firm has an adequate stock of inventory relative to sales and thus will not lose sales as a result of running out of stock.

a. True

b. False