What is the means of high turnover of inventory


Response to the following problem:

Suppose you calculate an inventory turnover for the Rapid Corporation of three times.

a. Explain why a high turnover may be seen as favorable information about the management of the firm.

b. Explain why a low turnover may be seen as unfavorable information about the management of the firm.

c. Explain how you would determine whether Rapid's inventory turnover indicates good operating performance.

 

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Financial Accounting: What is the means of high turnover of inventory
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