JPJ Corp has sales of $1 million, accounts receivable of $50,000, total assets of $5 million (of which $3 million are fixed assets), inventory of $150,000, and cost of goods sold of $600,000. What is JPJ's accounts receivable days? Fixed asset turnover? Total asset turnover? Inventory turnover?

Question

Business

Ainsley Thompson

14 March, 16:07

JPJ Corp has sales of $1 million, accounts receivable of $50,000, total assets of $5 million (of which $3 million are fixed assets), inventory of $150,000, and cost of goods sold of $600,000. What is JPJ's accounts receivable days? Fixed asset turnover? Total asset turnover? Inventory turnover?

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Answers (1)

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Trenton Taylor · Answer 1

Accounts Receivable Days = 18.25 days

Fixed Asset Turnover = 1/3 times

Total Asset Turnover = 1/5 times

Inventory Turnover = 4 times

Explanation:

Accounts Receivable Days

Accounts Receivable Days = (Accounts Receivable / Sales) x Number of

Days In a Year

Accounts Receivable = $50,000

Sales = $1 million = $1,000,000

Number of days in a year = 365 days

Accounts Receivable Days = ($50,000/$1,000,000) x 365 days

Accounts Receivable Days = (0.05) x 365 days

Accounts Receivable Days = 18.25 days

Fixed Asset Turnover

Fixed Asset Turnover = Sales/Fixed Assets

Sales = $1,000,000

Fixed Assets = $3 million = $3,000,000

Fixed Asset Turnover = $1,000,000 / $3,000,000

Fixed Asset Turnover = 1/3 times

Total Asset Turnover

Total Asset Turnover = Sales/Total Assets

Sales = $1,000,000

Total Assets = $5 million = $5,000,000

Total Asset Turnover = $1,000,000 / $5,000,000

Total Asset Turnover = 1/5 times

Inventory Turnover

Inventory Turnover = Cost of Goods Sold/Total Inventory

Cost of Goods Sold = $600,000

Total Inventory = $150,000

Inventory Turnover = $600,000/$150,000

Inventory Turnover = 4 times