Asked by Salvador Cuauhtémoc on Jul 16, 2024
Verified
Calculate gross profit given the following information: accounts receivable = $3,500; inventory = $4,500; receivable turnover = 80 times; inventory turnover = 18 times.
A) $199,000
B) $209,000
C) $219,000
D) $229,000
E) $239,000
Receivable Turnover
A financial ratio that measures how efficiently a company collects its accounts receivable.
Inventory Turnover
A measure indicating the frequency at which a company's inventory is sold and replenished within a certain timeframe, reflecting the effectiveness of its inventory control.
Gross Profit
The difference between revenue and the cost of goods sold before deduction of overheads, payroll, taxation, and interest payments.
- Estimate net earnings by scrutinizing crucial financial variables such as tax rate, turnover ratios, and operating expenses.
- Study a firm’s ability to meet short-term obligations and operational productivity by analyzing cash accounts and turnover indices.
Verified Answer
Learning Objectives
- Estimate net earnings by scrutinizing crucial financial variables such as tax rate, turnover ratios, and operating expenses.
- Study a firm’s ability to meet short-term obligations and operational productivity by analyzing cash accounts and turnover indices.
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