Question: STU Inc. wants to analyze its efficiency using activity ratios. The financial data for the year is as follows: Cost of Goods Sold: $300,000 Inventory


  • STU Inc. wants to analyze its efficiency using activity ratios. The financial data for the year is as follows:

    • Cost of Goods Sold: $300,000
    • Inventory at the beginning of the year: $50,000
    • Inventory at the end of the year: $70,000
    • Accounts Receivable at the beginning of the year: $40,000
    • Accounts Receivable at the end of the year: $30,000

  • Calculate the following activity ratios:

    • Inventory Turnover Ratio
    • Accounts Receivable Turnover Ratio

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