Nordstrom, inc. operates department stores in numerous states. suppose selected financial statement data (in millions) for 2017 are presented below. end of year beginning of year cash and cash equivalents $ 770 $ 69 accounts receivable (net) 1,950 1,880 inventory 810 860 other current assets 590 331 total current assets $4,120 $3,140 total current liabilities $2,030 $1,640 for the year, net credit sales were $8,258 million, cost of goods sold was $5,328 million, and net cash provided by operating activities was $1,251 million. compute the current ratio, accounts receivable turnover, average collection period, inventory turnover and days in inventory at the end of the current year. (round current ratio to 2 decimal places, e. g. 1.83 and all other answers to 1 decimal place, e. g. 1.8. use 365 days for calculation.) current ratio : 1 accounts receivable turnover times average collection period days inventory turnover times days in inventory days click if you would like to show work for this question: open show work

1. Current ratio is 2.02 times

2. Accounts receivable turnover ratio is 4.31 times

3.  Average collection period in days are 84.68 days

4.  Inventory turnover ratio is 6.38 times

5. Days in inventory is 57.21 days

Explanation:

The formulas and calculations are shown below:

1. Current ratio =  Total Current assets ÷ total current liabilities

                        = $4,120 ÷ $2,030

                        = 2.02 times

2. Accounts receivable turnover ratio

= Credit sales ÷ average accounts receivable

where,

Average accounts receivable = (Opening balance of Accounts receivable + ending balance of Accounts receivable) ÷ 2

= ($1,950 + $1,880) ÷ 2

= $1,915 million

And, the net credit sale is $8,258 million

Now put these values to the above formula

So, the answer would be equal to

=  $8,258 million ÷ $1,915 million

= 4.31 times

3. Average collection period in days = Total number of days in a year ÷ accounts receivable turnover ratio

= 365 days ÷ 4.31 times

= 84.68 days

4. Inventory turnover ratio =

= Cost of goods sold ÷ average inventory

where,

Average inventory = (Opening balance of inventory + ending balance of inventory) ÷ 2

= ($810 + $860) ÷ 2

= $835 million

And, the cost of good sold is $5,328 million

Now put these values to the above formula

So, the answer would be equal to

= $5,328 million ÷ $835 million

= 6.38 times

5. Days in inventory

= Total number of days in a year ÷ inventory turnover ratio

= 365 days ÷  6.38 times

= 57.21 days

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