Question

end Benchmark 2016 2015 Ind. Avg. LIQUIDITY Current Quick 1.60 X 0.90 x 1.90 1.20 1.80 1.00 ASSET MANAGEMENT 2.80 Inventory Turnover Days Sales Outstanding 125.00 days 125.00 Fixed Asset Turnover Total Asset Turnover 2.75 130.00 0.80 0.40 2.60x 0.80 X 0.40 x 0.90 0.45 Consider the table above, which of the following is true? O The quick ratio indicates a possible short term liquidity problem. O The current ratio indicates a high level of profitability. O The days sales outstanding is improving relative to last year. The inventory turnover is better than the benchmark
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Answer is a

the quick ratio indicates a possible short term liquidity problem because this ratio has decreased in comparison of previous year and also below the industry average

Add a comment
Know the answer?
Add Answer to:
end Benchmark 2016 2015 Ind. Avg. LIQUIDITY Current Quick 1.60 X 0.90 x 1.90 1.20 1.80...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Trend 2015Ind. Avg. Benchmark 2016 LIQUIDITY Current Quick 1.60 x 0.901x 1.90 1.20 1.80 1.00 ASSET...

    Trend 2015Ind. Avg. Benchmark 2016 LIQUIDITY Current Quick 1.60 x 0.901x 1.90 1.20 1.80 1.00 ASSET MANAGEMENT Inventory Turnover Days Sales Outstanding Fixed Asset Turnover Total Asset Turnover 2.80 125.00 days 125.00 0.90 0.45 2.75 130.00 0.80 0.40 2.60 x 0.80 x 0.40 x Consider the table above, which of the following is true? O The current ratio is better than return on assets for measuring profitability. The total asset turnover is headed in the wrong direction. O The fixed...

  • Liquidity Current ratio 2014 = current assets/current liabilities 204,000/89,000 = 2.292 for 2014 and 230,000/90,000 =...

    Liquidity Current ratio 2014 = current assets/current liabilities 204,000/89,000 = 2.292 for 2014 and 230,000/90,000 = 2.555 for 2015 Quick Ratio = current assets-inventory/current liabilities 204,000-66,000/89000= 1.550 for 2014 and 230,000-75000/90,000 = 1.722 for 2015 Accounts receivable turnover Credit sales/average debts Average debt 75000+82000/2 = 78500 Total sales = 3,199,900/78500 = 40.76 times (2015) Days sales outstanding = average accounts receivable/sales credit 78500/3199900 x 360 = 8.83 days (2015) Inventory turnover 66,000+75,000/2 = 70,500 Inventory turnover ratio = cost of...

  • current ratio 2.292 and 2.555 (2015) quick ratio 1.55 and 1.722 (2015); accounts receivable turnover 40.76;...

    current ratio 2.292 and 2.555 (2015) quick ratio 1.55 and 1.722 (2015); accounts receivable turnover 40.76; days sales outstanding 8.83; inventory turnover ratio 11.495 times; and average days to sell inventory; 31 debt to assets ratio 0.56 debt to equity = 1.30 interest coverage ratio = 141.66, plant assets to long term disabilities = 0.36 net margin ratio 0.30; asset turnover ratio = 12.9; return on investment = 3.88; return on equity 8.92% We were unable to transcribe this image12/31/2014...

  • Based on the information given for the ratios for 2010 and 2009: a. Has liquidity position...

    Based on the information given for the ratios for 2010 and 2009: a. Has liquidity position improved or worsened? Explain. b. Has the company's ability to manage its assets improved or worsened? Explain. c. How has the company's profitability changed during the last year? Ratio Analysis 2010 2009 Industry Avg Liquidity Ratios    Current Ratio 2.44 2.52 2.58    Quick Ratio 0.58 0.65 1.53 Asset Management Ratios    Inventory Turnover 5.00 7.14 7.69    Days Sales Outstanding 45.63 43.80 47.45...

  • QUESTION 4 As a barometer of short-term liquidity the current ratio is limited by the nature...

    QUESTION 4 As a barometer of short-term liquidity the current ratio is limited by the nature of its components. All of the following are reasons that this is true except: C A firm could have a high current ratio but not be able to meet demands for cash because inventory is salable only at discounted rices. C The balance sheet is prepared as of a particular date and the actual amount of liquid assets may vary considerably from the date...

  • 2013 2014 2015 Formula Current Ratio Quick Ratio Operating Cash Flow to Average Current Liabiliti...

    2013 2014 2015 Formula Current Ratio Quick Ratio Operating Cash Flow to Average Current Liabilities Days Accounts Receivable 1 Low ST liquidity risk high Low ST liquidity risk 0.4 Low ST liquidity risk Current Assets/ Current Liabilities (Cash+ShortTermInvestments+AccountsReceivable Current Liabilities Operating Cash Flow/0.5(Current Liabilities-2Year) 365/Accounts Receivable Turnover Ratio Accounts Receivable Turnover-Sales 0.5(Accounts Receivable-2Year) 565 Inventory lurnover Ratio Inventory Turnover Ratio Costs of Goods Sold'0.5(Inventory-2Year) 365/Accounts Payable Tumover Ratio Accounts Payable Turnover-Purchase 0.5(Accounts Payable-2Year) Purchase-Cost of Goods Sold+Ending Inventory-Beginning Inventory Days...

  • 3. You have been hired as an analyst for Bank WA and your team is working...

    3. You have been hired as an analyst for Bank WA and your team is working on an independent assessment of Duck Food Inc. (DF Inc.). DF Inc. is a firm that specializes in the production of freshly imported farm products from New Zealand. Your assistant has provided you with the following data + about the company and its industry. 2018- Ratio 2018 2017 2016 Industry Average Long-term debt 0.45 0.40 0.35 0.35 Inventory Turnover 62.65 42.42 32.25 53.25 Depreciation/Total...

  • 2013 2014 2015 Formula Current Ratio Quick Ratio Operating Cash Flow to Average Current Liabilities Days...

    2013 2014 2015 Formula Current Ratio Quick Ratio Operating Cash Flow to Average Current Liabilities Days Accounts Receivable 1 Low ST liquidity risk high Low ST liquidity risk 0.4 Low ST liquidity risk Current Assets/ Current Liabilities (Cash+ShortTermInvestments+AccountsReceivable Current Liabilities Operating Cash Flow/0.5(Current Liabilities-2Year) 365/Accounts Receivable Turnover Ratio Accounts Receivable Turnover-Sales 0.5(Accounts Receivable-2Year) 565 Inventory lurnover Ratio Inventory Turnover Ratio Costs of Goods Sold'0.5(Inventory-2Year) 365/Accounts Payable Tumover Ratio Accounts Payable Turnover-Purchase 0.5(Accounts Payable-2Year) Purchase-Cost of Goods Sold+Ending Inventory-Beginning Inventory Days...

  • Please help me with requirements 1C-g, 2 and 3. thank you %E12-32B (similar to) Question Help...

    Please help me with requirements 1C-g, 2 and 3. thank you %E12-32B (similar to) Question Help The financial statements of Evans News, Inc, include the following items B Click the icon to view the financial statements) Read the courements Requirement 1. Calculate the following ratios for 2018 and 2017 When calculating days, round your answer to the nearest whole number a. Current ratio Select the formula and then enter the amounts to calculate the current ratio (Round the ratios to...

  • Correctly answer is part of question 3 Aa Aa 3. Asset management ratios Asset management ratios...

    Correctly answer is part of question 3 Aa Aa 3. Asset management ratios Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio,...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT