Answer
The inventory turnover ratio may be too high if the company has minimal funds tied up in inventory.
Work Step by Step
This also indicates that the company is losing sales opportunities because of inventory shortages.
Accounting: Tools for Business Decision Making, 5th Edition
by Kimmel, Paul D.; Weygandt, Jerry J.; Kieso, Donald E.
Published by
Wiley
ISBN 10:
1118128168
ISBN 13:
978-1-11812-816-9
Chapter 6 - Reporting and Analyzing Inventory - Questions - Page 313: 22
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