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 the inventory turnover ratio will generally lead to an increase in the ROE. c. 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. d. A reduction in inventories held would have no effect on the current ratio. e. An increase in inventories would have no effect on the current ratio.
