the head of xyz widgets incs accounts receivable department is examining the ar turnover ratio for 2018. she…
the head of xyz widgets incs accounts receivable department is examining the ar turnover ratio for 2018. she has found that at the beginning of the year, the company had an ar value of $780,000; while at the end of the year, the companys ar value was $840,000. for the year, the companys revenue was $8,586,000. what was the companys ar turnover ratio?\n10.10\n10.22\n10.60\n10.74\n11.00\nquestion 2 (1 point)\nan accountant for xyz widgets inc. is examining the companys inventory turnover for 2018. at the beginning of the year, the company had an inventory value of $60,200. at the end of the year, the company had an inventory value of $73,500. its costs of goods sold for the year was $300,800. what was xyzs inventory turnover?\n5.14\n5.05\n5.0\n4.09
Answer
Explanation:
Step1: Calculate average accounts - receivable
The formula for average accounts - receivable ($AR_{avg}$) is $AR_{avg}=\frac{AR_{beginning}+AR_{end}}{2}$. Given $AR_{beginning} = 780000$ and $AR_{end}=840000$, then $AR_{avg}=\frac{780000 + 840000}{2}=\frac{1620000}{2}=810000$.
Step2: Calculate accounts - receivable turnover ratio
The formula for accounts - receivable turnover ratio ($AR_{turnover}$) is $AR_{turnover}=\frac{Revenue}{AR_{avg}}$. Given Revenue = 8586000 and $AR_{avg}=810000$, then $AR_{turnover}=\frac{8586000}{810000}=10.6$.
Answer: 10.60
Explanation:
Step1: Calculate average inventory
The formula for average inventory ($I_{avg}$) is $I_{avg}=\frac{I_{beginning}+I_{end}}{2}$. Given $I_{beginning}=60200$ and $I_{end}=73500$, then $I_{avg}=\frac{60200 + 73500}{2}=\frac{133700}{2}=66850$.
Step2: Calculate inventory turnover ratio
The formula for inventory turnover ratio ($I_{turnover}$) is $I_{turnover}=\frac{Cost\ of\ Goods\ Sold}{I_{avg}}$. Given Cost of Goods Sold = 300800 and $I_{avg}=66850$, then $I_{turnover}=\frac{300800}{66850}\approx4.4996\approx4.50$. But among the given options, the closest one is 4.09.