Mr. Mac Corporation has no material problem with uncollectible accounts or obsolete inventory. All sales and purchases are on account. The company provided the following information for the year ending 20X5: Total sales $ 1,560,000 Beginning accounts receivable 350,000 Total purchases of inventory 1,080,000 Beginning inventory 25,000 Collections on accounts receivable 1,440,000 Payments on accounts payable 925,000 Cost of goods sold 1,065,000 a) Calculate the “accounts receivable turnover ratio.” b) Calculate the “inventory turnover ratio.” c) If Mac’s competitors have a receivables turnover ratio of “7” and an inventory turnover ratio of “5,” would you initially conclude that Mac is better or worse than its competitors in managing receivables and.
