Towers Company is interested in monitoring its liquidity as closely as possible. This means that it wants to have the supplier finance its inventory as long as possible and collect cash owed to it as quickly as possible. The company had the following financial statement accounts as of December 31, 1998, December 31, 1999, and December 31, 2000 .

1. Calculate the accounts payable turnover for 1999 and 2000 .
2. Calculate the number of days' sales in payables for 1999 and 2000.
3. Calculate the accounts receivable turnover and number of days' sales in accounts receivable for 1999 and 2000 .
4. Calculate the inventory turnover and number of days' sales in inventory for 1999 and 2000 .
5. Answer the following questions:

a. On average, how long does it take from the time Towers buys inventory until it collects cash?

b. What percentage of the time in answer

(a) is financed by Towers suppliers?

c. What percentage of the time in answer

(a) is financed by Towers Company?

d. Can Towers Company speed up its cash collections most by focusing on inventory or accounts receivable management?

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Dec. 31, 2000 in 000's Dec. 31, 1999 Dec. 31, 1998 Relevant balance sheet accounts: Cash Accounts receivable Inventory $ 2,200 $ 2,500 $ 2,000 16,000 17,000 15,000 33,000 35,000 31,000 Accounts payable 19,000 20,000 18,000 Relevant income statement accounts: Sales $280,000 $310,000 $252,000 Costs of goods sold 155,000 160,000 150,000