Question
Asked Feb 4, 2020
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Crockett Electronics has a quick ratio of 2.00x, $26,775 in cash, $14,875 in accounts receivable, some inventory, total current assets of $59,500, and total current liabilities of $20,825. The company reported annual sales of $400,000 in the most recent annual report.

Over the past year, how often did Crockett Electronics sell and replace its inventory?

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Expert Answer

Step 1

Quick ratio of the firm is 2.00x , current assets is $59,500 and current liabilities is $20825. Therefore, inventory of the firm can be calculated as below:

Finance homework question answer, step 1, image 1

Step 2

Inventory turnover helps in determining the number of times inventory is sold and replaced in each period. It is calculated as cost of goods sold divided by inventory; however, it can also give an approximate value when sales is divided by inve...

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