Polk Software Inc. has a quick ratio of 2.00x, $32,850 in cash, $18,250 in accounts receivable, some inventory, total current assets of $73,000, and total current liabilities of $25,550. The company reported annual cost of goods sold of $100,000 in the most recent annual report.
Over the past year, how often did Polk Software Inc. sell and replace its inventory?
4.57 x
2.86 x
8.01 x
5.03 x
The inventory turnover ratio across companies in the software industry is 3.88x. Based on this information, which of the following statements is true for Polk Software Inc.?
Polk Software Inc. is holding less inventory per dollar of sales compared to the industry average.
Polk Software Inc. is holding more inventory per dollar of sales compared to the industry average.