Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 57

Analyzing the Inventory Turnover Ratio
A manufacturer reported an inventory turnover ratio of 8.6 during 2012. During 2013, management introduced a new inventory control system that was expected to reduce average inventory levels by 25 percent without affecting sales volume. Given these circumstances, would you expect the inventory turnover ratio to increase or decrease during 2013 Explain.