Problem:
W.F. Bailey Company had a quick ratio of 1.4, a current ratio of 3.0, an inventory turnover of 5x, total current assets of $810,000, and cash and equivalents of $120,000.
Required:
Question: If the cost of goods sold equaled 86 per cent of sales, what were Bailey's annual sales and DSO?
Note: Provide support for rationale.