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QUESTION FOUR [20] 4.1 Explain why a higher inventory turnover ratio does not always indicate a better management of working capital. (10) 4.2 Crystal Eletronics
QUESTION FOUR [20] 4.1 Explain why a higher inventory turnover ratio does not always indicate a better management of working capital. (10) 4.2 Crystal Eletronics has presented the following estimates relating to 2019 activities: Quarter ending 31 March 30 June 30 September 31 December Sales revenue R750 000 R875 000 R1 000 000 R1 062 500 Purchases R481 250 R512 500 R487 500 R525 000 Cost of sales R375 000 R437 500 R500 000 R531 250 The following information was given: 1. Sales in the December quarter 2018 were R 625 000. II. All sales are on credit, of which 70% are collected in the quarter of sale and 30% in the following quarter. Required: Prepare a schedule of receipts from debtors showing cash collections for each quarter of 2019
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