It is more useful to compare a company's inventory turnover with its own results from prior periods than with other companies' r

Question

Mrac [35]

2 years ago

15

It is more useful to compare a company's inventory turnover with its own results from prior periods than with other companies' r

atios ______.

Business

1 answer:

Sergio039 [100] · Answer 1 · 2023-08-29T13:29:00+03:00

The comparison is inadvisable because companies may use different accounting methods which may cause the turnovers to vary significantly.

<h3>What is the use of inventory turnover?</h3>

The financial ratio is a tool that is used to know many times that a company has sold and replaced inventory during a given period.

However, because different companies use different accounting methods which may cause the turnovers to vary significantly, the decision is not advisable.