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    Ratio Calculation

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    Use the annual information found on the attach file to calculate the following asset activity ratios for the end of 2005:

    Average Collection Period
    Inventory Turnover
    Total Asset Turnover

    Including formulae and calculations used to arrive at financial values.

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    Solution Preview

    Average collection period is the time taken to collect the credit sales. This is calculated by finding the the number of days of sale in the accounts receivable. To find this, we need to divide the ...

    Solution Summary

    The solution explains how to calculate the following ratios Average Collection Period, Inventory Turnover, Total Asset Turnover