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Alta Construction days sales outstanding is 50 days (365 days in a year). The company’s accounts...

Alta Construction days sales outstanding is 50 days (365 days in a year). The company’s accounts receivable equal 100 million and its balance sheet shows inventory equal to 125 million. What is the company’s inventory turnover ratio? (assume that the company has a gross profit margin of 35%).

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Answer #1

In order to arrive at the answer, we must calculate first the Sales made during the period from the Days sales outstanding method.

Then we must fix the sales in the figure in inventory turnover ratio.

The answer for question is attached in following image-

Please comment for any explanation,

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