• STU Inc. wants to analyze its efficiency using activity ratios. The financial data for the year is as follows:

  • Cost of Goods Sold: $300,000
  • Inventory at the beginning of the year: $50,000
  • Inventory at the end of the year: $70,000
  • Accounts Receivable at the beginning of the year: $40,000
  • Accounts Receivable at the end of the year: $30,000

• Calculate the following activity ratios:

  • Inventory Turnover Ratio
  • Accounts Receivable Turnover Ratio