Asked by Graciela Rodriguez on Jun 01, 2024
Verified
An aircraft company would most likely have
A) a high inventory turnover.
B) low profit margin.
C) high volume.
D) a low inventory turnover.
Inventory Turnover
A ratio showing how many times a company has sold and replaced inventory over a period.
Profit Margin
A financial metric indicating the percentage of revenue that remains as profit after all expenses are subtracted from sales.
- Cultivate the capability to discern the importance of asset turnover ratios in recognizing the efficiency with which a business employs its assets.
- Understand the process of calculating and utilizing the inventory turnover ratio to gauge a firm's inventory management effectiveness.
Verified Answer
ZK
Zybrea KnightJun 07, 2024
Final Answer :
D
Explanation :
An aircraft company would have a low inventory turnover as the production and sales cycle for planes takes a significant amount of time. They may also have a high volume, but that is not necessarily reflected in their inventory turnover. Additionally, the profit margin can vary depending on the company and market conditions.
Learning Objectives
- Cultivate the capability to discern the importance of asset turnover ratios in recognizing the efficiency with which a business employs its assets.
- Understand the process of calculating and utilizing the inventory turnover ratio to gauge a firm's inventory management effectiveness.