Decline in Inventory Turnover
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A firm is conducting an analysis of trends over tiem and discovers that its inventory turnover has declined. This may be due to:
a. an increase in sales b. an increase in cost of goods sold
c. an increase ininventory purchases d. a decrease in inventory purchases
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Solution Summary
This solution explains how to determine the cause of a decline in inventory turnover.
Solution Preview
The inventory turnover ratio is represented by this formula:
Turnover = Sales ...
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