A small pizza restaurant, founded and owned by the Martinelli sisters, would be expected to have which
Question:
A small pizza restaurant, founded and owned by the Martinelli sisters, would be expected to have which of the following?
a. High price-earnings ratio
b. High inventory turnover and low gross margin
c. Low inventory turnover and high gross margin
d. Low accounts receivable turnover and low gross margin
e. All of the above
Step by Step Answer:
All of the above The Martinelli sister...View the full answer
Cornerstones of Managerial Accounting
ISBN: 978-0324660135
3rd Edition
Authors: Mowen, Hansen, Heitger
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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