A comparison of 2017 to 2016 performance shows that Neir Company's inventory turnover increased substantially although sales
Question:
A comparison of 2017 to 2016 performance shows that Neir Company's inventory turnover increased substantially although sales and inventory amounts were essentially unchanged.
Required:
Which of the following statements best explains the increased inventory turnover ratio?
1. Cost of goods sold decreased.
2. Accounts receivable turnover increased.
3. Total asset turnover increased.
4. Gross profit percentage decreased.
Inventory Turnover RatioInventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
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Inventory turnover is Cost of goods sold divided by Average ...View the full answer
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Related Book For 
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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