BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The average collection period is 365 days divided by accounts receivable turnover, which is calculated by dividing net sales by average accounts receivable. Average accounts receivable is the sum of beginning and ending accounts receivables divided by 2.

Detailed explanation-2: -You can calculate the inventory turnover ratio by dividing the inventory days ratio by 365 and flipping the ratio. In this example, inventory turnover ratio = 1 / (73/365) = 5. This means the company can sell and replace its stock of goods five times a year.

Detailed explanation-3: -Explanation: Average sales period = (Average inventory * 365 days) / Cost of sales.

Detailed explanation-4: -Average collection period is calculated by dividing a company’s average accounts receivable balance by its net credit sales for a specific period, then multiplying the quotient by 365 days.