2010       2011
Cash and marketable securities   $ 50,000  $ 50,000
Accounts receivable                    300,000   350,000
Inventories                                350,000   500,000
Total current assets                 $700,000   $900,000
Accounts payable                     $200,000   $250,000
Bank loan                                      0          150,000
Accruals                                   150,000     200,000
Total current liabilities               $350,000  $600,000

1) The Robinson Company had net sales of $1,200,000 in 2010 and $1,300,000 in 2011.

a) Find out the receivables turnover in each year.

b) Compute average collection period for each year.

c) Based on receivables turnover for 2010, evaluate the investment in receivables if net sales were $1,300,000 in 2011.

d) How much of a change in the 2011 receivables occurred?

2) Assume the Robinson Company had a cost of goods sold of $1,000,000 in 2010 and $1,200,000 in 2011.

a) Compute inventory turnover for each year. Comment on your findings.

b) What would have been a amount of inventories in 2011 if 2010 turnover ratio had been maintained?