Designer Suits Rental has been in business for four years. Because the company has recently had a…

Designer Suits Rental has been in business for four years. Because the company has recently had a cash flow problem, management wonders whether there is a problem with receivables or inventories. Selected figures from the company’s financial statements (in thousands) follow

2014 2013 2012 2011

Net sales $144.0 $112.0 $96.0 $80.0

Cost of goods sold 90.0 72.0 60.0 48.0

Accounts receivable (net) 24.0 20.0 16.0 12.0

Merchandise inventory 28.0 22.0 16.0 10.0

Accounts payable 13.0 10.0 8.0 5.0

Compute the receivables turnover, inventory turnover, and payables turnover for each of the four years, and comment on the results relative to the cash flow problem that the firm has been experiencing. Merchandise inventory was $11,000, accounts receivable were $11,000, and accounts payable were $4,000 in 2010. (Round to one decimal place.)

 

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