Inventory Turnover Ratios The inventory turnover ratios for Ronto Manufacturing, Star Jewelers, and Kelty Food Marts, are
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Inventory Turnover Ratios The inventory turnover ratios for Ronto Manufacturing, Star Jewelers, and Kelty Food Marts, are 4.5, 1.2, and 12.3, respectively.
a. How is the inventory turnover ratio calculated? What information is provided by this ratio?
b. How is inventory turnover evaluated? Is the company with the highest turnover ratio operated the most efficiently? Explain your answer.
c. Evaluate the turnover ratios for the three enterprises. Are the differences in ratios consistent with what you would expect? Explain.
d. What other ratios would you examine to assess operating efficiency for the companies?
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