Explain how the accounts receivable and inventory turnover ratio s can be useful in assessing a companys

Question:

Explain how the accounts receivable and inventory turnover ratios can be useful in assessing a company’s liquidity, especially when considered together with the current ratio.

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...

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