Question
Wilson Corporation has the following financial data; inventory of $3 million, cost of goods sold of $6 million and no accounts receivable. Jensen Corporation has
Wilson Corporation has the following financial data; inventory of $3 million, cost of goods sold of $6 million and no accounts receivable. Jensen Corporation has the following financial data; accounts receivable of $2.1 million, sales of $12 million, inventory of $1 million and cost of goods sold of $5 million. Which of the following statements is true?
A. Jensens inventory turnover is 5 and Wilsons days receivables is 0
B. Wilsons days inventory is 33 and Jensens inventory turnover is 11
C. Jensen has lower operating cash flow than Wilson because it has a higher inventory turnover ratio
D. Wilsons days inventory is 104 and Jensens accounts receivable turnover is 9
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