Accounting for IGCSE & O level - Advanced Principles (Section 1 - No. 21)
Inventory turnover ratio measures the rate at which inventory is sold and replaced over a given period. Which factor is least relevant to increasing a company's inventory turnover ratio?
Increase sales.
Reduce excess inventory.
Improve inventory management.
Offer extended credit terms to customers.
Explication
Offering extended credit terms to customers can slow down the inventory turnover ratio.