(a)
Introduction:
Inventory turnover ratio measures the number of times a company has sold its inventory.
Receivable turnover ratio measures the number of times company collects its accounts receivable.
To calculate:
Inventory turnover ratio and receivable turnover ratio.
(b)
Introduction:
Inventory turnover ratio measures the number of times a company has sold its inventory.
Receivable turnover ratio measures the number of times company collects its accounts receivable.
To calculate:
Average days collection period of account receivables and average days to sell inventory.
(c)
Introduction:
Inventory turnover ratio measures the number of times a company has sold its inventory.
Receivable turnover ratio measures the number of times company collects its accounts receivable.
To comment:
On the above results.
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MANAGERIAL ACCOUNTING W/CONNECT
- FINANCIAL RATIOS Based on the financial statements for Jackson Enterprises (income statement, statement of owners equity, and balance sheet) shown on pages 596597, prepare the following financial ratios. All sales are credit sales. The Accounts Receivable balance on January 1, 20--, was 21,600. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and average number of days required to collect receivables 6. Inventory turnover and average number of days required to sell inventoryarrow_forwardFINANCIAL RATIOS Based on the financial statements, shown on pages 605606, for McDonald Carpeting Co. (income statement, statement of owners equity, and balance sheet), prepare the following financial ratios. All sales are credit sales. The balance of Accounts Receivable on January 1, 20--, was 6,800. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and the average number of days required to collect receivables 6. Inventory turnover and the average number of days required to sell inventoryarrow_forwardFINANCIAL RATIOS Based on the financial statements, shown on pages 603604, for McDonald Carpeting Co. (income statement, statement of owners equity, and balance sheet), prepare the following financial ratios. All sales are credit sales. The balance of Accounts Receivable on January 1, 20--, was 6,800. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and average number of days required to collect receivables 6. Inventory turnover and average number of days required to sell inventoryarrow_forward
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