Question $2$

$0\mathrm{.}15$ pts

Which of the following statements regarding asset management ratios is true?

If a company's operating cycle is longer than its payment period for suppliers, the company may need to borrow money to fund its inventory purchases.

To increase total asset turnover, management must either increase sales revenues or reduce total stockholders' equity.

If a company starts purchasing merchandise inventory in large lots to take advantage of quantity discounts, its inventory turnover ratio will increase.

$$ As the accounts receivable turnover ratio increases, the average gollection period increases.