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P8.11A (LO 5) The following selected ratios are available for Pampered Pets Inc. for the most recent three years: 2021 2020 2019 Current ratio 2.6:1
P8.11A (LO 5) The following selected ratios are available for Pampered Pets Inc. for the most recent three years: 2021 2020 2019 Current ratio 2.6:1 2.4:1 2.1:1 Receivables turnover 8.2 times 7.4 times 6.7 times Inventory turnover 9.9 times 8.7 times 7.5 times Instructions a. Calculate the average collection period and days in inventory for each year. b. Is Pampered Pets' liquidity improving or worsening? Explain. c. Do changes in turnover ratios affect profitability? Explain. d. Do changes in turnover ratios affect cash flow? Explain. e. Identify any steps that the company may wish to take in order to improve its management of receivables and inventory
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