The Following Selected Company Information Was Reported Calculate the Following Company Ratios:
(A)Accounts Receivable Turnover
(B)Inventory Turnover

question 24

Essay

The following selected company information was reported:
$$\begin{array} { | l | r | } \hline \text { Accounts receivable, beginning-year } & \$ 170,000 \\\hline \text { Accounts receivable, year-end } & 190,000 \\\hline \text { Merchandise inventory, beginning-year } & 80,000 \\\hline \text { Merchandise inventory, year-end } & 60,000 \\\hline \text { Cost of goods sold } & 580,000 \\\hline \text { Credit sales } & 1,000,000 \\\hline\end{array}$$
Calculate the following company ratios:
(a)Accounts receivable turnover
(b)Inventory turnover
(c)Days' sales uncollected

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Definitions:

Economic Profits

Earnings that exceed the total costs of production, including both explicit and implicit costs, representing a return above the firm's opportunity costs.

Industry Growth

Industry growth refers to the expansion and increased output of a specific sector of the economy, driven by factors like demand, innovation, and investment.

Normal Profits

The minimum level of profit necessary for a company to remain competitive in the market, also seen as the cost of keeping an entrepreneur in business.

Economic Profits

Profits calculated by subtracting both the explicit and implicit costs from a firm's total revenues; a measure of earnings exceeding the opportunity costs.