How can I respond to this discussion? Days sales = 365/ Inventory Turnover Industry: 365/2.69= 135.69, so...

90.2K

Verified Solution

Question

Finance

How can I respond to this discussion?
Days sales = 365/ Inventory Turnover
Industry: 365/2.69= 135.69, so days sales for industry is135.69.
Company: 365/15.82= 23.07, so days sales for company is23.07.
Taking into consideration that a company with a quick ratiogreater 1, has a liquidity that allows for meeting short-termobligations. This company has a quick ratio of .91. The reasons forthis could be a number of things, from delayed collections ofaccounts receivable to decreasing sales (Wohlner). The industry hasa quick ratio of .72, so the company does have a higher quickratio. I am not sure if that means that they are doing well, whenthe industry is not, or the opposite. I think that it means theformer, but would definitely take any clarificationoffered.

Answer & Explanation Solved by verified expert

3.8 Ratings (561 Votes)

The ideal quick ratio is 1 but this varies from indutry to industry the industry standard for the quick ratio is 072 however the company has a better quick ratio of 091 this shows a better capacity to See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

How can I respond to this discussion?Days sales = 365/ Inventory TurnoverIndustry: 365/2.69= 135.69, so days sales for industry is135.69.Company: 365/15.82= 23.07, so days sales for company is23.07.Taking into consideration that a company with a quick ratiogreater 1, has a liquidity that allows for meeting short-termobligations. This company has a quick ratio of .91. The reasons forthis could be a number of things, from delayed collections ofaccounts receivable to decreasing sales (Wohlner). The industry hasa quick ratio of .72, so the company does have a higher quickratio. I am not sure if that means that they are doing well, whenthe industry is not, or the opposite. I think that it means theformer, but would definitely take any clarificationoffered.