The 2011 and 2012 balance sheets for Victor and Sons showed net accounts receivable of $12,000 and $16,000, respectively, inventory of $9,000 and $7,000, respectively, and accounts payable of $6,500 and $7,500, respectively. The company’s 2012 income statement showed net sales of $102,200 and cost of goods sold of $72,270.
Assume all sales on credit. Compute the following ratios for 2012:
1. Accounts receivable turnover
2. Inventory turnover