Compute the receivables turnover and payables turnover

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Reference no: EM13913974

Accounting Connection- Designer Suits Rental has been in business for four years. Because the company has recently had a cash flow problem, management wonders whether there is a problem with receivables or inventories. Selected figures from the company's financial statements (in thousands) follow.

	2014	2013	2012	2011
Net sales	$144.0	$112.0	$96.0	$80.0
Cost of goods sold	90.0	72.0	60.0	48.0
Accounts receivable (net)	24.0	20.0	16.0	12.0
Merchandise inventory	28.0	22.0	16.0	10.0
Accounts payable	13.0	10.0	8.0	5.0

Compute the receivables turnover, inventory turnover, and payables turnover for each of the four years, and comment on the results relative to the cash flow problem that the firm has been experiencing. Merchandise inventory was $11,000, accounts receiv- able were $11,000, and accounts payable were $4,000 in 2010. (Round to one decimal place.)

Reference no: EM13913974

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