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Freiman Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year 2 and Year 1 (in thousands of dollars) Assets

Freiman Corporation's most recent balance sheet and income statement appear below:

Balance Sheet

December 31, Year 2 and Year 1

(in thousands of dollars)

Assets

Year 2

Year 1

Current assets:

Cash

$160

$120

Accounts receivable

220

240

Inventory

120

130

Prepaid expenses

40

40

Total current assets

540

530

Plant and equipment, net

700

700

Total assets

$1,240

$1,230

Liabilities and Stockholders Equity

Current liabilities:

Accounts payable

$130

$150

Accrued liabilities

90

90

Notes payable, short term

60

70

Total current liabilities

280

310

Bonds payable

280

290

Total liabilities

560

600

Stockholders equity:

Common stock, $2 par value

100

100

Additional paid-in capital-common stock

200

200

Retained earnings

380

330

Total stockholders equity

680

630

Total liabilities & stockholders equity

$1,240

$1,230

Income Statement

For the Year Ended December 31, Year 2

(in thousands of dollars)

Sales (all on account)

$1,310

Cost of goods sold

780

Gross margin

530

Selling and administrative expense

359

Net operating income

171

Interest expense

35

Net income before taxes

136

Income taxes (30%)

41

Net income

$95

The inventory turnover for Year 2 is closest to:

0.92

6.50

1.08

6.24

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