You prefer to extend credit on the assumption that you will be paid in full within...
You prefer to extend credit on the assumption that you will be paid in full within 48 days of the sales. Firm X has average inventory of $570,000 with all cash sales (no credit sales) of $6,700,000. If you extend credit to this firm, can you expect to be paid on time? Assume 365 days in a year. Round your answer to the nearest whole number.
The inventory turnover is ____ days, therefore, you -Select-can/cannot expect to be paid in 48 days.
Homework Answers
Inventory turnover ratio = Total Sales/Inventory
6700000/570000
11.75438596
Inventory turnover ratio is 11.75 days. So we can definitely
expect the firm to pay within 48 days
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