Based on the Following Data for the Current Year, Compute

question 25

Multiple Choice

Based on the following data for the current year, compute the inventory turnover. ? $$\begin{array} { l r } \text { Net sales on account during the year } & \$ 585,000 \\\text { Cost of merchandise sold during the year } & 380,000 \\\text { Accounts receivable, beginning of year } & 47,000 \\\text { Accounts receivable, end of year } & 36,000 \\\text { Inventory, beginning of year } & 92,000 \\\text { Inventory, end of year } & 113,000\end{array}$$

• A) 1.1
• B) 1.9
• C) 3.7
• D) 2.9

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Definitions:

Statement Of Cash Flows

A financial statement showing the cash inflows and outflows for a business over a period of time, divided into operating, investing, and financing activities.

Repurchasing Capital Stock

A corporate action in which a company buys back its own shares from the marketplace, reducing the amount of outstanding stock.

Negative Free Cash Flow

A situation where a company's cash outflows exceed its cash inflows during a specific period, indicating potential financial difficulties.

Free Cash Flow

The amount of cash generated by a company after accounting for operational expenses and capital expenditures.