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Syed's industries has accounts receivable of $700, inventory of $1,200, sales of $4,200, and cost of goods sold of $3,500. how long does it take syed's to both sell its inventory and then collect the payment on the sale?

Respuesta :

In order to find Inventory in days we may use the below formula:

Inventory in Days=[tex]\frac{365}{Inventory Turnover Ratio}[/tex]

Inventory TurnOver Ratio=[tex]\frac{Cost of Goods Sold}{Inventory}[/tex]

Inventory Turnover Ratio=[tex]\frac{3500}{1200}[/tex]

Inventory Turnover Ratio=2.9166

Inventory in Days=[tex]\frac{365}{2.91666}[/tex]

Inventory in Days= 125 Days(Approximately)

Days in Accounts Receivable = [tex]\frac{365}{Accounts Recievable Turnover}[/tex]

Accounts Receivable Turnover=[tex]\frac{Sales}{Accounts Receivable}[/tex]

Accounts Receivable Turnover=[tex]\frac{4200}{700}[/tex]

Accounts Receivable Turnover=6

Accounts Receivable in Days=[tex]\frac{365}{6}[/tex]

Accounts Receivable in days=60.83 days|(approx)

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