Drugal Brewing Co. has a quick ratio of 2.00x, $30,825 in cash, $17,125 in accounts receivable, some inventory, total current assets of $68,500, and total current liabilities of $23,975. The company reported annual sales of $100,000 in the most recent annual report.
Over the past year, how often did Drugal Brewing Co. sell and replace its inventory?
0.35x
4.87x
5.36x
0.39x
The inventory turnover ratio across companies in the industry is 4.14x. Based on this information, which of the following statements is true for Drugal Brewing Co.?
- Drugal Brewing Co. is holding fewer inventories per dollar of sales compared to the industry average.
- Drugal Brewing Co. is holding more inventories per dollar of sales compared to the industry average.