Question

Polk Software Inc. has a quick ratio of 2.00x, $32,850 in cash, $18,250 in accounts receivable, some inventory, total current assets of $73,000, and total current liabilities of $25,550. The company reported annual sales of $100,000 in the most recent annual report.

Answer 1

Answer:

4.57x

Explanation:

Completion of the question

Over the past year, how often did Polk Software Inc, sell and replace its inventory?

First, we need to calculate Polk Software's Inventory rom its Total Current Asset

= Total Current Asset s= $73,000

Cash- $32,850

Accounts Receivable= $18,250

Total Current Assets= Cash + Accounts Receivable + Inventory

= $73,000= $32,850 + $18,250 + Inventory

Inventory = $73,000-$32,850-$18,250

Inventory= $21,900

Secondly, calculate inventory turnover

Inventory turnover= Annual Sales / Inventory

= $100,000/$21,900

= 4.57x