Respuesta :
Answer:
a Walmart - 4.34 days, Target - 3.69 days
b. Walmart - 7.99 times, Target - 6.02 times
Explanation:
a. The formula to the computation of account receivable days is shown below:
= (Account receivable ÷ credit sales) × total number of days in a year
So, For Walmart, the account receivable days equal to
= ($5,724 ÷ $481,391) × 365 days
= 4.34 days
And, for Target, the account receivable days equal to
= ($752 ÷ $74,354 × 365 days
= 3.69 days
b. The formula to compute inventory turnover is shown below:
Inventory turnover = Cost of goods sold ÷ inventory
So, For Walmart, the Inventory turnover equal to
= $361,009 ÷ $45,181
= 7.99 times
And, for Target, the Inventory turnover equal to
= $51,930 ÷ $8,614
= 6.02 times
c. Based on account receivable days, the target company go good as it has fewer days than the Walmart
And, based on inventory turnover, the Walmart company manage the inventory more efficiently as it has high inventory turnover than the Target company
