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How would you challenge this response? Or would you agree with this rationale? Managers at Kohl's assess key financial ratios for strategic decision - making
How would you challenge this response? Or would you agree with this rationale?
"Managers at Kohl's assess key financial ratios for strategic decisionmaking and operational efficiency. Return on Investments guides resource allocation, and evaluating the success of expansions and new locations. Gross Profit Margin aids in product line profitability, directing resource allocation for higher returns. The Current Ratio ensures liquidity for shortterm obligations, crucial for smooth operations during uncertainties. DebttoEquity Ratio assesses risk capacity, guiding financial leveraging for growth while managing risk. Monitoring inventory turnover assists managers in evaluating inventory management efficiency. A higher turnover rate signals quicker sales and replacement of inventory, reducing carrying costs and obsolete inventory. This knowledge aids in making informed purchasing decisions, optimizing cash flow, and maintaining optimal inventory levels. These ratios shape Kohl's strategies, aligning investments with longterm goals, and ensuring financial stability, and operational efficiency."
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