The higher the inventory turnover, the better. True False
The higher the inventory turnover, the better.
True
False
Homework Answers
Solution :
Inventory Turnover is a measure of the number of times a firm is able to sell its inventory, and subsequently restock its inventory in a given time period.
A high inventory turnover means a company is quick in selling its goods, that are in inventory.
A low inventory turnover means a company is slow at selling its goods in inventory.
Thus higher the inventory turnover, the better.
The formula for calculating the Inventory Turnover ratio is
= Sales / Inventory or = Cost of goods sold / Average Inventory
Thus the statement is True.
The solution is Option 1 = True.
a) True or false: The simple rule for inventory turnover is that a low ration is...
a) True or false: The simple rule for inventory turnover is that a low ration is preferable. b) True or false: An error in the ending inventory balance will cause an error in the calculation of cost of goods sold. c) True or false: Underwood had cost of goods sold of $8 million and its ending inventory was $2 million. Therefore, its days' sales in inventory equals 25 days. d) True or false: The choice of an inventory valuation method...
true or false: An increase in inventory turnover will improve a company’s cash flow
true or false: An increase in inventory turnover will improve a company’s cash flow
QUESTION 8: Receivables turnover, inventory turnover and gross margin would be critical measures for what type...
QUESTION 8: Receivables turnover, inventory turnover and gross margin would be critical measures for what type of firm? an electric utility compaany a service firm a merchandising firm an architectural firm QUESTION 10: The higher the equity multiplier, the better. True False QUESTION 11: The ratio that indicates the firm’s ability to use assets to generate operating profit is the basic earning power equity multiplier return on equity days sales outstanding
TRUE OR FALSE Overhead Cost : A. True or False / It is usually better to...
TRUE OR FALSE Overhead Cost : A. True or False / It is usually better to spread fixed factory overhead costs over more units compared to fewer units (as long as the units made can be sold). B.True or False / If actual variable overhead per unit is less than budgeted variable overhead, then the variance will be unfavorable. C. True or False / In general, the more overhead incurred, the higher the resulting profit.
True or False 1. Asset turnover measures a company's profitability. 2. NOPAT is equivalent to income...
True or False 1. Asset turnover measures a company's profitability. 2. NOPAT is equivalent to income from operating activities. 3. If Company A is more profitable than Company B, then Company A will have a higher RNOA than Company B. 4. Ratios provide one way to compare companies in the same industry regardless of their size. 5. Highly leveraged firms have higher ROE than lower leveraged firms. 6. All things equal, the higher a company's inventory turnover rate, the better....
QUESTION 12: The higher the times interest earned, the better. True False QUESTION 13: The market...
QUESTION 12: The higher the times interest earned, the better. True False QUESTION 13: The market to book ratio and price earnings ratio indicate the firm's liquidity the firm's ability to quickly liquidate investments and turn them into cash the firm's efficiency in generating funding by selling their common stock market sentiment toward the firm
Question 23 (0.2 points) Which of the following is NOT true about the inventory turnover ratio?...
Question 23 (0.2 points) Which of the following is NOT true about the inventory turnover ratio? O It is calculated by dividing inventory by cost of goods sold. Too high a turnover or too low a turnover could be a warning sign. OIt measures how many times the inventory is turned over into saleable products. The more times a firm can turnover its inventory, the better.
Which of the following statements on inventory turnover is incorrect? a. Inventory turnover is equal to...
Which of the following statements on inventory turnover is incorrect? a. Inventory turnover is equal to the cost of goods sold divided by average inventory. b. When costs are rising, inventory turnover under LIFO will be lower than under FIFO. c. When costs are decreasing, inventory turnover under LIFO will be lower than under FIFO. d. When costs are rising, inventory turnover under LIFO will be higher than under FIFO. Which of the following statements is incorrect? a.Inventory write-offs decrease...
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True or False. A company with a low accounts receivable turnover ties up a smaller proportion of its funds in accounts receivable than a company with a high turnover.
a) True or false: The simple rule for inventory turnover is that a low ration is preferable. b) True or false: An error in the ending inventory balance will cause an error in the calculation of cost of goods sold. c) True or false: Underwood had cost of goods sold of $8 million and its ending inventory was $2 million. Therefore, its days' sales in inventory equals 25 days. d) True or false: The choice of an inventory valuation method...
True or False 1. Asset turnover measures a company's profitability. 2. NOPAT is equivalent to income from operating activities. 3. If Company A is more profitable than Company B, then Company A will have a higher RNOA than Company B. 4. Ratios provide one way to compare companies in the same industry regardless of their size. 5. Highly leveraged firms have higher ROE than lower leveraged firms. 6. All things equal, the higher a company's inventory turnover rate, the better....
Question 23 (0.2 points) Which of the following is NOT true about the inventory turnover ratio? O It is calculated by dividing inventory by cost of goods sold. Too high a turnover or too low a turnover could be a warning sign. OIt measures how many times the inventory is turned over into saleable products. The more times a firm can turnover its inventory, the better.
In general, the REPO rate is higher than FED FUND rate. True or False True False uces
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