Answer:
a. JPJ's accounts receivable days: 14.79 days
b. JPJ's Fixed asset turnover: 0.38
c. JPJ's Total asset turnover: 0.24
d. JPJ's Inventory turnover: 3.86
Explanation:
a. The accounts receivable days is calculated by using following formula:
The accounts receivable days = (Accounts receivable/Annual Sales) x Number of days in the year = ($47,000/$1,160,000) x 365 = 14.79 days
Fixed asset turnover = Net Sales/Fixed assets = $1,160,000/$3,050,000 = 0.38
Total asset turnover helps investors understand how effectively companies are using their assets to generate sales. Total asset turnover is calculated by using following formula:
Total Asset Turnover = Total Sales/Total Assets = $1,160,000/$4,810,000 = 0.24
Inventory turnover = Cost of goods sold/Inventory = $590,000/$153,000 = 3.86
