THE UNIVERISTY OF THE PEOPLE

BUS 1102
LEARNING JOURNAL UNIT 5

SOLUTIONS
1
A.)
ABC =112.65
123= 97.85

On a personal point of view, 123 group is the best option since it has a higher accounts
receivable turnover ratio. This implies that it is faster to collect debts from receivables
B.)
Year 1= 1.49
Year 2= 1.29
The turnover ratio of the company has reduced in two years which will imply that the demand of
product has been progressively declining and sales are also decreasing in year 2.
C.)
Year 1= 257.98
Year 2= 283.31
Number of days' sale in inventory ratio has increased in year two which implies that the company
is taking longer than year 1 to sell off its inventory.
2.
It is better to invest in 123 group in the sense that the company is able to collect funds from
customers at a faster pace than ABC group and utilizes its assets effectively.
From chart 2, the company is not able to effectively sell the products in year 2 which leads to a
higher amount of working capital requirement.