Question
30. Which of the following statement is false? A. In general, its better to have a low inventory turnover ratio than a high one, as
30. Which of the following statement is false? A. In general, its 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 because of running out of stock. B. The days sales outstanding tells us how long it takes, on average, to collect after a sale is made. The DSO can be compared with the firms credit terms to get an idea of whether customers are paying on time. C. If a firms fixed assets turnover ratio is significantly higher than its industry average, this could indicate that it uses its fixed assets very efficiently or is operating at over capacity and should probably add fixed assets. D. Debt management ratios show the extent to which a firms managers are attempting to magnify returns on owners capital using financial leverage. E. None of the above
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