Compute the accounts receivable turn over

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Reference no: EM132234170

Question - The following selected data were taken from the records of Delta Company:

 

Beginning

Ending

Accounts receivable - net

60,000

40,000

Inventory

55,000

65,000

Sales (All on credit)

 

600,000

Cost of goods sold

 

360,000

Required:

A. Compute the following ratios:

1. Accounts receivable turn over

2. Average collection period

3. Inventory turnover

4. Days sales in inventory

B. Delta's credit term is 2/10, n/30. The industry average inventory turnover is 8 times. Comment on Delta's efficiency in managing its accounts receivable and inventory.

Reference no: EM132234170

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