Harvey Supplies Inc.has a current ratio of 3.0,a quick ratio of 2.4,and an inventory turnover ratio of 6.Harvey's total assets are $1 million and its debt ratio is 0.20.The firm has no long-term debt.What is Harvey's sales figure if the total cost of goods sold is 75% of sales?

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Explanation:Current ratio = 3.0 = Current assets / Current liabilitiesQuick ratio = 2.4 = (Current assets - Inventory) / Current liabilitiesInventory turnover ratio = 6 = Cost of goods sold / InventoryDebt ratio = 0.20 = Total debt / Total assetsTotal assets = $1 millionTotal debt = 0.20 * $1 million = $200,000Current liabilities = Total debt = $200,000Current assets = 3.0 * Current liabilities = 3.0 * $200,000 = $600,000Inventory = Current assets - (Current assets - Inventory) = $600,000 - (2.4 * $200,000) = $120,000Cost of goods sold = 6 * Inventory = 6 * $120,000 = $720,000Sales = Cost of goods sold / 0.75 = $720,000 / 0.75 = $960,000