Reference no: EM133909268

Problem

Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio. Consider the following case: Graham Pharmaceuticals has a quick ratio of 2.00x, $27,450 in cash, $15,250 in accounts receivable, some inventory, total current assets of $61,000, and total current liabilities of $21,350. The company reported annual sales of $400,000 in the most recent annual report. Additionally, the company's cost of goods sold is 75% of sales. Over the past year, how often did Graham Pharmaceuticals sell and replace its inventory? 8.01x 2.86x 16.39x 18.03x The inventory turnover ratio across companies in the pharmaceutical industry is 13.9315x. Get the instant assignment help. Based on this information, which statements is true for Graham Pharmaceuticals?