1.Which of the following statements about inventory turnover is most appropriate?

A.The most profitable turnover ratio may not necessarily be the highest.

B.A low ratio generally means the company is not keeping enough inventory on hand.

C.Companies generally strive to have the highest possible inventory turnover ratio.

D.A high ratio indicates the company is having trouble selling its inventory.

2.The rate of return on net sales is calculated as:

A.gross margin / net sales

B.operating income / net sales

C.dividends paid during the year / net sales

D.net income / net sales

3.Of the items listed below, the one most helpful in the comparison of different size companies is:

A.comparison of their working capital balances

B.comparison of their net incomes

C.horizontal analysis

D.preparation of commonsize financial statements