Asset management ratios

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:

Walker Telecommunications has a quick ratio of $2\mathrm{.}00x,$$$35,550$ in cash, $$19,750$ in accounts receivable, some inventory, total current

assets of $$79,000,$ and total current liabilities of $$27,650.$ The company reported annual sales of $$200,000$ 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 Walker Telecommunications sell and replace its inventory?

$8\mathrm{.}01x$

$6\mathrm{.}96x$

$2\mathrm{.}86x$

$6\mathrm{.}33x$