Pinecrest Company

Use the selected data from Pinecrest Company's financial statements to answer the following question.

	2018	2017
Cash	$ 22,000	$ 14,000
Accounts receivable	42,000	16,000
Merchandise inventory	22,000	83,000
Prepaid expenses	23,000	18,000
Total current assets	$109,000	$131,000
Total current liabilities	$ 65,000	$ 72,000
Net credit sales	221,000	326,000
Cost of goods sold	168,000	299,000
Net cash flow from operating activities	16,000	29,000

Refer to the data for Pinecrest Company.

Competitors in Pinecrest Company's industry have an average inventory turnover of 20.8 times. Its inventory turnover for 2018

a.is equal to the number of days' sales in the company's inventory.

b.indicates that the market may be reacting to problems in the sales department by reducing demand for the company's products.

c.indicates that the company is pricing its products too low.

d.indicates that the company has too little inventory on hand at the end of 2018.