Which of the following statements is correct? a) If a firm increases its sales and cost of
Fantastic news! We've Found the answer you've been seeking!
Question:
a) If a firm increases its sales and cost of goods sold while holding its inventories constant, then, other things held constant, its inventory turnover ratio will decrease.
b) A reduction in inventories held would have no effect on the current ratio.
c) An increase in inventories would have no effect on the current ratio.
d) If a firm increases its sales and cost of goods sold while holding its inventories constant, then, other things held constant, its inventory turnover ratio will increase.
e) A reduction in the inventory turnover ratio will generally lead to an increase in the ROE.
Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
Posted Date: