Accounting for IGCSE & O level - Advanced Principles (Section 1 - No. 19)
Which of the following best describes the relationship between inventory levels and inventory turnover?
Higher inventory levels result in higher inventory turnover.
Higher inventory levels result in lower inventory turnover.
Inventory turnover is unaffected by the level of inventory.
Inventory turnover and inventory levels are inversely related.
Explication
Higher inventory levels typically lead to a slower inventory turnover rate.