Can you please check my answer. If answer is not correct can you please give explanation. And if answer is correct can you provide a brief comment that support the solution. thx!

Following are data for December 31,2020:

Accounts receivable, December 31, 2020 $ 730,000

Accounts receivable, December 31, 2019 700,000

Merchandise inventories, December 31, 2020 166,500

Merchandise inventories, December 31, 2019 105,500

Cost of sales, and related buying and occupancy costs 492,000

Net sales 5,365,000

Assume 365 days in a year.

Required:

1. Compute the accounts receivable turnover ratio in 2020: ____7.5__________times

Required Computation: [AR Turn Over] = 5,365,000[Net Sales]/(700,000+730,000)/2[Avg Net AR]

2. What is the average collection period, in days, for accounts receivable: ___48.67___days

Required Computation: [Days Outstanding] = 365[Days in Year]/ 7.5[AR Turn Over]

3. Compute the inventory turnover for 2020. __3.62_______

Required Computation: [Invent Turnover] = 492,000[COGS]/(166,500+105,500)/2[Average Inventory]

4. Compute the average length of time in days to sell inventory. ___100.83_____

Required Computation: Inventory Days to Sell = 365 [# of Days in year]/ 3.62[Inventory Turnover]

5. Compute the Cash to Cash Operating Cycle __149.5 days________

Required Computation: [Cash-toCash Op Cycle\ = 48.67 [Avg AR Collection period] + 100.83 [Avg Time to Sell Inventory]

6. Evaluate the liquidity of accounts receivable and inventory.

Without knowing the industry of the company, or the prior 2-3 years' values for the same criteria, it is challenging to make a statement about the liquidity of this companys inventory or accounts receivable. I am comfortable stating that inventory turned over 3.62 times in 2020 which is every 100.83 days. I am also comfortable stating that the company was able to collect the value of AR 7.5 times in 2020 which is every 48.67 days. Whether or not those numbers are high, low, or average is contingent on industry averages, and comparisons with past years results, to which we do not have access.