Question: Combining the information provided by various ratios can enhance your understanding of the financial condition of a business. Review the information provided for Na Pali

Combining the information provided by various ratios can enhance your understanding of the financial condition of a business. Review the information provided for Na Pali Coast Company in the Mastery Problem. Using this information, respond to the following questions:

REQUIRED

1. Compute the average number of days required to sell inventory and collect cash from customers buying on account.

2. Note that Na Pali Coast Company also buys inventory on account. On average, how many days pass before Na Pali pays its creditors?

3. Using the information from your answers to parts (1) and (2), compute the number of days from the time Na Pali Coast pays for inventory until it receives cash from customers on account.

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1 As shown in the solution to the Mastery Problem parts 4a and 4b the accounts receivable turnover is 1257 or 2904 days The merchandise inventory turn... View full answer

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