Selected data of Islander Company follow: Required: 1. What is the accounts receivable turnover for 2014? 2.
Question:
Required:
1. What is the accounts receivable turnover for 2014?
2. What is the inventory turnover for2014?
As of December 3l 2014 $500,000 $475,000 $600,000 Balance Sheet Data 2013 $470,000 $450,000 $550,000 Accounts receivable Allowance for doubtful accounts Net accounts receivable (25,000) (20,000) Inventories lower of cost or market Year Ended December 3, Income Statement Data 2014 2013 Net credit sales Net cash sales Net sales 2,500,000 500,000 $3.000,000 $2,200,000 400,000 2,600,000 Cost of goods sold Selling, general, and administrative expenses Other Total operating expenses $2,000,000 300,000 50,000 2,350,000 $1,800,000 270,000 30,000 S2,100,000
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1 Accounts receivable turnover 541 times ...View the full answer
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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