Savory Thymes, Inc

question 158

Multiple Choice

Savory Thymes, Inc.had net credit sales of $9,000,000 and cost of goods sold of $5,250,000 for the year.The average inventory for the year amounted to $1,250,000.The average days in inventory during the year was approximately

• A)51 days.
• B)65 days.
• C)70 days.
• D)87 days.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to fund operations.

Current Ratio

A financial metric assessing a firm's capability to meet its short-term debts, determined by dividing its current assets by its current liabilities.

Days' Sales

The metric used to evaluate how efficiently a company can convert its inventory into sales, often expressed as days' sales in inventory.

Receivables

All money claims against other entities, including people, business firms, and other organizations.