Accounts Receivable and Inventory Ratios

Favor Company, whose current assets at December 31 are shown below, had net sales for the year of $580,000 and cost of goods sold of $345,900. At the beginning of the year, accounts receivable (net) were $121,000 and inventory was $154,650.

Cash	$28,000
Short-term investments	87,000
Accounts receivable (net)	125,000
Inventory	178,500
Prepaid expenses	11,500
Current assets	$430,000

Round the turnover calculations to two decimal points. Use 365 days in a year and round days calculations to the nearest day (whole number).

a. What is the companys accounts receivable turnover? Answer b. What is the companys average collection period? Answer days c. What is the companys inventory turnover? Answer d. What is the companys days sales in inventory? Answer days