Question: Calculate and interpret liquidity ratios Calculate the inventory turnover, days in inventory, Accounts receivable turnover and the Average Collection period for the years ending June 30, 2020, and 2019 for the Green Construction Supplies Company. Assuming that they have a 60-day credit policy, evaluate their accounts receivable management and recommend ways to improve it. Evaluate their inventory management and suggest ways to improve it. Selected information ($) 2020 2019 2018 Net Sales (80% on credit) 430,000 720,000 640,000 Cost of Goods Sold 250000 350000 320000 Accounts Receivable 220,000 110,000 76,000 Allowance for doubtful accounts 35000 18000 14000 Bad debt expense 30000 12000 9000 Inventory 150000 100000 80000
Question: Calculate and interpret liquidity ratios Calculate the inventory turnover, days in inventory, Accounts receivable turnover and the Average Collection period for the years ending June 30, 2020, and 2019 for the Green Construction Supplies Company. Assuming that they have a 60-day credit policy, evaluate their accounts receivable management and recommend ways to improve it. Evaluate their inventory management and suggest ways to improve it. Selected information ($) 2020 2019 2018 Net Sales (80% on credit) 430,000 720,000 640,000 Cost of Goods Sold 250000 350000 320000 Accounts Receivable 220,000 110,000 76,000 Allowance for doubtful accounts 35000 18000 14000 Bad debt expense 30000 12000 9000 Inventory 150000 100000 80000
Question: Calculate and interpret liquidity ratios Calculate the inventory turnover, days in inventory, Accounts receivable turnover and the Average Collection period for the years ending June 30, 2020, and 2019 for the Green Construction Supplies Company. Assuming that they have a 60-day credit policy, evaluate their accounts receivable management and recommend ways to improve it. Evaluate their inventory management and suggest ways to improve it. Selected information ($) 2020 2019 2018 Net Sales (80% on credit) 430,000 720,000 640,000 Cost of Goods Sold 250000 350000 320000 Accounts Receivable 220,000 110,000 76,000 Allowance for doubtful accounts 35000 18000 14000 Bad debt expense 30000 12000 9000 Inventory 150000 100000 80000
Question: Calculate and interpret liquidity ratios
Calculate the inventory turnover, days in inventory, Accounts receivable turnover and the Average Collection period for the years ending June 30, 2020, and 2019 for the Green Construction Supplies Company.
Assuming that they have a 60-day credit policy, evaluate their accounts receivable management and recommend ways to improve it.
Evaluate their inventory management and suggest ways to improve it.
Selected information ($)
2020
2019
2018
Net Sales (80% on credit)
430,000
720,000
640,000
Cost of Goods Sold
250000
350000
320000
Accounts Receivable
220,000
110,000
76,000
Allowance for doubtful accounts
35000
18000
14000
Bad debt expense
30000
12000
9000
Inventory
150000
100000
80000
Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.
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