A company has $25 million in cash, $85 million in accounts receivables, $200 million in average inventory over the past several years, and other assets of $83 million. Current liabilities are $120 million, and stockholders' equity is $65 million. This year, the company booked $250 million in sales.
From a fundamental analysis perspective, which of the following statements are true?
According to the Acid Test, the company should be able to meet its liabilities over the next year without any difficulty.
The company's inventory turns over at least 1 time per year.
The company generates $1.30 in sales for every dollar invested in plant and equipment.
Debt is used to finance 35% of the firm's assets
The company has $1.50 of assets for every $1 of liabilities that it must discharge within the next year.