For each ratio listed, identify whether the change in ratio value from 2008 to 2009 is usually
Question:
Rate 2009 2008 Radle 2009 2008 l. Profit margln 2. Debt ratio 3. Gross margin 4. Acid-test ratio 10% 43% 32% .20 9% 39% 44% 1.05 5. Accounts recelvable turnover 6. Basic earnings per share 7. Inventory turnover 8. Dividend yleld 6.7 5.5 $1.25 $1.10 3.4 3.6 4% 3.2%
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Ratio 2009 2008 Change 1 Profit Margin Ratio 10 9 Favorable 2 Debt Ratio ...View the full answer
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Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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