Question
How should you interpret a higher inventory turnover ratio?
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Answer
Inventory is sold and replaced more efficiently.
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Question
What is the formula for days of inventory on hand (DOH)?
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Answer
365/Inventory turnover
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Question
If DOH rises over time, what does it usually imply about operating efficiency?
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Answer
Inventory is moving more slowly; efficiency may be worsening.
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Question
What is the formula for the current ratio?
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Answer
Current assets/Current liabilities
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