Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 1 - No. 10)
If a company has an inventory turnover rate of 4, what does that mean?
The company sells and replaces its inventory 4 times per year.
The company's inventory is too high.
The company's inventory is not selling.
The company's profit margin is 4%.
Explanation
The turnover rate indicates how often inventory is sold and replaced.
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