Question

In general, it's better to have a low inventory turnover ratio than a high one, as a low ratio indicates that the firm has an adequate stock of inventory relative to sales and thus will not lose sales as a result of running out of stock.

a. True
b. False

Answer 1

Answer:

b. False

Explanation:

Inventory Turnover tells us how fast the business is selling it's product. It measure the number of time an average inventory is completed its process from finished goods / Inventory to sales to customer. Higher the inventory turnover lower time of holding the inventory of each unit. So, the statement given is false.