Question

Dave's Assets • Daves has calculated his assets for each of his stores as following: • Store 1's current merchandise inventory is valued at $250,000. Store 1 has accounts receivable totaling $59,000 and has $12,000 in cash available. The value of the fixtures in the store are worth approximately $8,000. • Store 2's current merchandise inventory is valued at $42,000. Store 2 has accounts receivable totaling $5,000 and has $32,000 in cash available. The value of the fixtures in the store are worth approximately $90,000. Dave's Store: Asset management Store1 Accounts Receivable Merchandise Inventor Fixed Assets Feral Assets Inventory Turnov Asset Turnover Asset Turnover

Answer 1

The computation is provided below:

Operating Expenses	Store 1	Store 2
Lease Cost	40000	75000
Advertising	20000
Salaries	190000	250000
Sales Comission	30000
Store Update Cost		100000
Repairs		25000
Insurance (1K x 3 + 2k x 9)		21000
Total Operating Expenses	280000	471000

Dave's Stores (Net Profit)	Store 1	Store 2
Gross Sales	950000	2010000
Sales Returns	19000	100500
Net Sales	931000	1909500
Cost of Goods Sold	450000	1300000
Gross Margin	481000	609500
Selling, General and Administrative	280000	471000
Operating Profit	201000	138500
Other Income (expense)	5000
Net Profit	206000	138500
SG&A percentage of sales	30.08	24.67
Net Profit %	22.13	7.25

Dave's Stores (Asset Management)	Store 1	Store 2
Accounts Receivable	59000	5000
Merchandise inventory	250000	42000
Cash	12000	32000
Fixed Assets	8000	90000
Total Assets	329000	169000
Inventory Turnover	3.72	45.46	Net Sales/Merch Inventory
Asset Turnover	2.83	11.30	Net Sales/Total Assets
ROA%	62.61	81.95	Net Profit/Total assets x 100