A successful grocery store would probably have a low inventory turnover. a high

Question

A successful grocery store would probably have a low inventory turnover. a high inventory turnover. zero profit margin. low volume. An aircraft company would most likely have a high inventory turnover low profit margin. high volume a low Inventory turnover. The following amounts were taken from the financial statements of Leaf Company: The profit margin ratio for 2017 is 15.4% 44.9 %. 16.5 % 10.7%. The net income for the year ended was $300,000. Common stockholders' equity at the beginning the year was $1,400,000 and $1,600,000 at the end of the year. The return on common stockh equity would be: 18.75%. 20.00%. 21.43%. 87.50%.

Explanation / Answer

45.

Average colletion period = 365 days / Accounts receivable turnover

Or,

Accounts receivable turnover = 365 days / Average collection period

Therefore,

If the average collection period is 60 days

Accounts receivable turnover = 365 days / 60 days = 6.08 times

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