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  3. days inventory is a measure of: select one: a. the

Days inventory is a measure of: Select one: a. the average length of time it...

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Question

Accounting

Days inventory is a measure of:

Select one:

a. the average length of time it takes to collect money due from debtors.

b. profitability.

c. the average length of time it takes to sell inventory.

d. market performance.

One ratio result on its own is meaningless unless it can be compared to an appropriate benchmark. An appropriate benchmark would be:

Select one:

a. all of the options are appropriate benchmarks.

b. other entities in the same industry.

c. industry averages.

d. the entity's ratios over time.

If an entity was not happy that its Days Inventory ratio had become longer, it could consider lowering selling prices to speed up sales.

Select one:

True

False

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