What information does inventory turnover provide?
Question:
Step by Step Answer:
The inventory turnov...View the full answer
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
Students also viewed these Managerial Accounting questions
-
How does inventory turnover provide information about a companys short-term liquidity?
-
What information does the merchandise turnover provide about a companys short-term liquidity?
-
What does the inventory turnover ratio measure? What does average-days-in-inventory mean?
-
The Bay City Parks and Recreation Department is considering building several new facilities, including a gym, an athletic field, a tennis pavilion, and a pool. It will base its decision on which...
-
You are the CEO of a large company seeking to invest in either Central or South America and have directed your staff to prepare a report and recommendations. Two of the countries you are assigned are...
-
Hedge funds are sometimes referred to as mutual funds for the super rich. They are typically an aggressively managed portfolio of investments that require a very large initial investment. In a study...
-
Adelphi Video Store maintains the following policies with regard to purchases of new videotapes at each of its branch stores: 1. Employees are required to take vacations, and the duties of employees...
-
Malone Supply Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31. Nov. 1...
-
\f
-
What volume of 0.556 M NaCl is needed to obtain 0.882 mol of NaCl?
-
How is an NSF check accounted for in the accounting records?
-
What is an example of a business that would have a high inventory turnover? A low inventory turnover?
-
The marginal revenue product (per week) of hiring an additional craftsperson is closest to: A. \( 100\). B. \( 900\). C. \( 1,000\). A firm produces handcrafted wooden chairs, employing both skilled...
-
The area of a circle is decreasing at a constant rate of 122 square inches per minute. At the instant when the area of the circle is 16 square inches, what is the rate of change of the radius? Round...
-
Sean Paul makes deposits of $500 at the beginning of every 3 months. Interest earned by the deposits is 8% compounded quarterly. what will the balance in Seans account be after 10 years? how much of...
-
How do you solve for market risk premium without expected return and risk free rate?
-
The Walters accumulated $ 2 5 6 0 0 0 during more than 4 0 years of work They originally deposited this money in a 5 - year time deposit earning 5 % and used the income for living expenses on...
-
The position of a particle moving along the x-axis is modeled by x(t) = ln(t2)+t2. When is the velocity of the particle equal to 5?
-
Identify at least one general cash control objective, one control objective for cash receipts, and one control objective for cash disbursements. For each control objective, identify a specific...
-
Write a paper about the Working relationship in the organization- collaboration within and outside the organization
-
Determine the acid and base that were neutralized to produce each of the following salts. (a) Sodium fluoride, NaF(aq) (b) Magnesium iodide, MgI 2 (aq) (c) Calcium nitrate, Ca(NO 3 ) 2 ( aq) (d)...
-
Axon Corporation, which has three divisions, is preparing its sales budget. Each division expects a different growth rate because economic conditions vary in different regions of the country. The...
-
Carmen's Dress Delivery operates a mail-order business that sells clothes designed for frequent travelers. It had sales of $400,000 in December. Because Carmen's Dress Delivery is in the mail-order...
-
Carmen's Dress Delivery operates a mail-order business that sells clothes designed for frequent travelers. It had sales of $400,000 in December. Because Carmen's Dress Delivery is in the mail-order...
-
Emily was hired as the Chief Technology Officer (CTO) of Delta Corporation, a privately-owned company in the telecommunications sector, effective February 1, 2022. Throughout the fiscal year 2023,...
-
Compute Quick Ratio: Requirements: From the balance sheet data, where: Quick Assets: $120,000 Current Liabilities: $50,000 Calculate the quick ratio. Express the quick ratio as a numerical value....
-
The Starbucks Corporation operates a chain of coffee shops worldwide. Last month, one of its locations produced 5,000 cups of coffee at a total cost of $10,000. When production increased to 6,000...
Study smarter with the SolutionInn App