Selected financial data for Shum-way Ltd. are shown below.
(a) Calculate for each of 2013 and 2014, the following ratios:
(1) Receivables turnover,
(2) Collection period,
(3) Inventory turnover.
(4) Days sales in inventory, and
(5) Operating cycle.
(b) Based on the ratios calculated in (a), what conclusion(s) can be drawn about the management of the receivables and inventory?

Net sales Cost of goods sold Accounts receivable (gross) Inventory 2014 $6,420,000 4,540,000 850,000 1,020,000 2013 $6,240,000 4,550,000 750,000 980,000 2012 $5,430,000 3,950,000 650,000 840,000