Question

Crawford Construction has a quick ratio of 2.00x, $32,175 in cash, $17,875 in accounts receivable, some inventory, total current assets of $71,500, and total current liabilities of $25,025. The company reported annual cost of goods sold of $300,000 in the most recent annual report. Over the past year, how often did Crawford Construction sell and replace its inventory? 2.86 x 13.99 x 15.39 x 8.01 x

Answer 1

Answer:

13.99x(times)

Explanation:

We will start off with computing the value of inventory.

Value of inventory = Total current assets - Cash - Account receivables

= $71,500 - $32,175 - $17,875

= $21,450

Inventory turnover ratio = Sales / Inventory

= $300,000 / $21,450

= 13.99 times

Over the past years, Crawford Construction Company sold and replaced it's inventory at 13.99x(times)