Selected recent balance sheet and income statement information for Summersun, Inc. follows:
$$\begin{array} { l r r }
\text { (in millions) } & 2019 & 2018 \
\hline \text { Average inventory } & \mathbf { 7 , 0 2 9 } & \mathbf { \$ 7 , 8 2 1 } \
\text { Average accounts receivable } & \mathbf { 7 , 3 0 5 } & \mathbf { 7 , 9 8 9 } \
\text { Average accounts payable } & \mathbf { 2 , 9 4 9 } & \mathbf { 3 , 4 0 0 } \
\text { Sales } & \mathbf { 3 7 , 8 0 0 } & \mathbf { 5 0 , 1 9 7 } \
\text { Cost of goods sold } & \mathbf { 3 0 , 2 0 9 } & \mathbf { 3 9 , 9 0 7 } \
\hline
\end{array}$$ a. Calculate accounts receivable turnover for 2019 and 2018. Has it improved during the year or worsened?
b. Calculate inventory turnover for 2019 and 2018. Has it improved during the year or worsened?

Question

Selected recent balance sheet and income statement information for Summersun, Inc. follows:
 $$\begin{array} { l r r } 
\text { (in millions) } & 2019 & 2018 \
\hline \text { Average inventory } & \mathbf { 7 , 0 2 9 } & \mathbf { \$ 7 , 8 2 1 } \
\text { Average accounts receivable } & \mathbf { 7 , 3 0 5 } & \mathbf { 7 , 9 8 9 } \
\text { Average accounts payable } & \mathbf { 2 , 9 4 9 } & \mathbf { 3 , 4 0 0 } \
\text { Sales } & \mathbf { 3 7 , 8 0 0 } & \mathbf { 5 0 , 1 9 7 } \
\text { Cost of goods sold } & \mathbf { 3 0 , 2 0 9 } & \mathbf { 3 9 , 9 0 7 } \
\hline
\end{array}$$ a. Calculate accounts receivable turnover for 2019 and 2018. Has it improved during the year or worsened?
b. Calculate inventory turnover for 2019 and 2018. Has it improved during the year or worsened?

Quizplus · Accepted Answer

The Answer of Selected recent balance sheet and income statement information for Summersun, Inc. follows:
 $$\begin{array} { l r r } 
\text { (in millions) } & 2019 & 2018 \
\hline \text { Average inventory } & \mathbf { 7 , 0 2 9 } & \mathbf { \$ 7 , 8 2 1 } \
\text { Average accounts receivable } & \mathbf { 7 , 3 0 5 } & \mathbf { 7 , 9 8 9 } \
\text { Average accounts payable } & \mathbf { 2 , 9 4 9 } & \mathbf { 3 , 4 0 0 } \
\text { Sales } & \mathbf { 3 7 , 8 0 0 } & \mathbf { 5 0 , 1 9 7 } \
\text { Cost of goods sold } & \mathbf { 3 0 , 2 0 9 } & \mathbf { 3 9 , 9 0 7 } \
\hline
\end{array}$$ a. Calculate accounts receivable turnover for 2019 and 2018. Has it improved during the year or worsened?
b. Calculate inventory turnover for 2019 and 2018. Has it improved during the year or worsened?

Selected Recent Balance Sheet and Income Statement Information for Summersun