What is the inventory turnover ratio for ABC Corp. if cost of goods sold equals $5,000, current ratio equals 3, quick ratio equals 1.5, and the firm has $1,800 in current assets

Inventory turnover = 5.5 times

Explanation:

Current ratio is given as 3

Cost of goods sold = $5,000

Current assets = $1,800

Quick ratio = 1.5

Current ratio = current assets / current liabilities

3 = 1,800 / current liabilities

Current liabilities = 1,800/3

Current liabilities = $600

Quick ratio = Cash and Receivables / Current liabilities

1.5 = Cash and Receivables/600

Cash and Receivables = 600 * 1.5 = $900

Current asset = Cash and Receivables + Inventory

1,800 = 900 + Inventory

Inventory = 1,800-900

Inventory = $900

Inventory turnover = Cost of goods sold / Inventory

Inventory turnover = 5,000/900

Inventory turnover = 5.5 times