Question

JPJ Corp has sales of $1.32 million, accounts receivable of $47,000, total assets of $5.23 million (of which $2.93 million are fixed assets), inventory of $156,000, and cost of goods sold of $609,000. What is JPJ's accounts receivable days? Fixed asset turnover? Total asset turnover? Inventory turnover?

Answer 1

JPJ Corp's accounts receivable days is approximately 13 days. The fixed asset turnover is approximately 0.45. The total asset turnover is approximately 0.252. The inventory turnover is approximately 3.91.

Step-by-step explanation:

To calculate JPJ Corp's accounts receivable days, we can use the formula: Accounts Receivable Days = (Accounts Receivable / Sales) * 365. Plugging in the values, Accounts Receivable Days = ($47,000 / $1,320,000) * 365 = 13.15 (approximately 13 days).

The fixed asset turnover is calculated using the formula: Fixed Asset Turnover = Sales / Average Fixed Assets. Plugging in the values, Fixed Asset Turnover = $1,320,000 / $2,930,000 = 0.45 (approximately 0.45).

The total asset turnover is calculated using the formula: Total Asset Turnover = Sales / Average Total Assets. Plugging in the values, Total Asset Turnover = $1,320,000 / $5,230,000 = 0.252 (approximately 0.252).

The inventory turnover is calculated using the formula: Inventory Turnover = Cost of Goods Sold / Average Inventory. Plugging in the values, Inventory Turnover = $609,000 / $156,000 = 3.91 (approximately 3.91).