A company has an inventory turnover ratio of 3, while the industry average is 5. What does this suggest?

• A. The company is more efficient in managing its inventory compared to its competitors.
• B. The company is less efficient in managing its inventory compared to its competitors.
• C. The company has a higher cost of goods sold than its competitors.
• D. The company has a lower average inventory than its competitors.

Answer: (B)