For a large retail clothing chain, quarterly financials are used to evaluate overall health of the operations. The chain reports a Q3 reported revenue of $50,572,500. Over the past several years, 32% of sales are via the chains own consumer credit lines (i.e., cards). The accounts receivables on the Q3 financial statement showed $14,900,000 in active receivables at the end of the quarter.

a. Compute the accounts receivable turnover ratio. What does this measure indicate regarding the ability of the retail firm to collect its receivables?

b. Additionally, across all stores, the cost of goods sold was $25,550,000 with average inventories of 8,668,000. Based on these financials, compute the average number of times the inventory is sold and replaced during the year. Based on this ratio, would you conclude that the firm is efficiently managing its inventories? Why or why not?