Accounting 0452 · IGCSE · Interpretation of accounting ratios

Interpretation of accounting ratios — practice question

A company gave the following data on its rate of inventory turnover. year 1: 24 times year 2: 25 times year 3: 27 times What factors could account for the changes in the ratio?

  • ACost of sales is decreasing.
  • BInventory is increasing.
  • CSales volume is increasing.
  • DSelling price is increasing.

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