Concept
How does the inventory turnover ratio affect working capital and customer satisfaction?
IntroductionToBusiness OP 8D04gAa / 16.3. Obtaining Short-Term Financing*
"Turnover ratios. This ratio shows how quickly inventory moves through the firm and is turned into sales. If the inventory number is too high, it will typically affect the amount of working capital a company has on hand, forcing the company to borrow money to cover the excess inventory. If the turnover ratio number is too high, it means the company does not have enough inventory of products on hand to satisfy customer needs, which means they could take their business elsewhere."
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