Question

Monroe manufacturing has a quick ratio of 2.00x $31,000 in cash $17,500 in accounts recivable some inventory total current assets of $70,000 and total current liabilities of $24,500 the company reported annaul sales of $400,000 in the most recent annual reportOver the past year how often did Monroe manufacturing sell and replace its inventory?A) 19.05 xB) 20.96 xC) 2.86 xD) 8.01 x

Answer 1

Inventory turnover ratio = 19.05 times

Step-by-step explanation:

Quick ratio = (Current assets - Inventory) / Current liabilities

2 = (70,000 - Inventory) / 24,500

Inventory = $21,000

Inventory turnover ratio = Total sales / Inventory

Inventory turnover ratio = 400,000 / 21,000

Inventory turnover ratio = 19.05 times