QUESTION $6$

Which of the following statements is CORRECT?

a$.$ A reduction in the inventory turnover ratio will generally lead to an increase in the ROE.

b$.$ If a firm increases its sales while holding its inventories constant, then, other things held constant, its inventory turnover ratio will increase.

c$.$ An increase in inventories will have no effect on the current ratio.

d$.$ If a firm increases its sales while holding its inventories constant, then, other things held constant, its fixed assets tumover ratio will decline.

e$.$ A reduction in inventories will have no effect on the current ratio.