Question - Modern 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. Here are selected figures from the company's financial statements (in thousands):
2011 2010 2009 2008
Net sales 2011-$288.0 2010-$224.0 2009-$192.0 2008-$160.0
Cost of goods sold 2011-180.0 2010-144.0 2009-120.0 2008-96.0
Accounts receivable (net) 2011-48.0 2010-40.0 2009-32.0 2008-24.0
Merchandise inventory 2011-56.0 2010-44.0 2009-32.0 2008-20.0
Accounts payable 2011-26.0 2010-20.0 2009-16.0 2008-10.0
Compute the receivable 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 $22,000, accounts receivable were $22,000, and accounts payable were $8,000 in 2007.