Stanley's inventory turnover ratio is? ### Accounts Receivable and Inventory Turnover Ratios#### Instructions:Use the information below to calculate the accounts receivable and inventory turnover ratios. Then use that information to answer Question 3. Use the Worksheet tab to develop your answers and then record your answers in Blackboard.#### Information:Stanley Corporation has no material problem with uncollectible accounts or obsolete inventory. All sales and purchases are on account. The company provided the following information for the year ending 2022:- **Total Sales:** $2,600,000- **Beginning Accounts Receivable:** $700,000- **Total Purchases of Inventory:** $1,800,000- **Beginning Inventory:** $50,000- **Collections on Accounts Receivable:** $2,400,000- **Payments on Accounts Payable:** $1,850,000- **Cost of Goods Sold:** $1,775,000#### Tasks:1. **Calculate the "Accounts Receivable Turnover Ratio."**2. **Calculate the "Inventory Turnover Ratio."**3. If Stanley's competitors have a receivables turnover ratio of "6" and an inventory turnover ratio of "4", would you initially conclude that Stanley is better or worse than its competitors in managing receivables and inventory?#### Diagram Explanation:There are no graphs or diagrams in the provided information. The tasks require calculations based on the given financial data.#### Additional Notes:- **Accounts Receivable Turnover Ratio**: This ratio measures how efficiently a company collects revenue from its credit customers. It is typically calculated as: \[ \text{Accounts Receivable Turnover Ratio} = \frac{\text{Total Sales}}{\text{Average Accounts Receivable}} \] - **Inventory Turnover Ratio**: This ratio measures how efficiently a company turns its inventory into sales. It is usually calculated as: \[ \text{Inventory Turnover Ratio} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}} \]**For accurate results, remember to calculate the average accounts receivable and average inventory by taking the average of the beginning and ending balances. If ending balances are not given, additional assumptions may be needed.**

The ratio is used to evaluate the firm's financial situation and helps management in making…

Answered: Stanley's inventory turnover ratio is?

Stanley's inventory turnover ratio is?

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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