Accounting for IGCSE & O level - Advanced Principles (Section 8 - No. 44)
What is the potential financial risk associated with having a low inventory turnover ratio?
Increased carrying costs, and obsolescence of inventory.
Potential stockouts and lost sales.
Inefficient inventory management.
High sales volume.
ব্যাখ্যা
A low turnover means inventory is held longer, and can incur costs.