Question

The 2018 income statement of Anderson Medical Supply Company reported net sales of $8 million, cost of goods sold of $4.8 million, and net income of $800,000. The following table shows the company's comparative balance sheets for 2018 and 2017: ($ in 000s) 2018 2017 Assets Cash $ 300 $ 380 Accounts receivable 700 500 Inventory 900 700 Property, plant, and equipment (net) 2,400 2,120 Total assets $ 4,300 $ 3,700 Liabilities and shareholders’ equity Current liabilities $ 960 $ 830 Bonds payable 1,200 1,200 Paid-in capital 1,000 1,000 Retained earnings 1,140 670 Total liabilities and shareholders' equity $ 4,300 $ 3,700

Answer 1

Answer:

Inventory Turnover ratio
Inventory - Beginning	$700
Inventory - Ending	$900
Average Inventory	$800
Cost of goods sold	$4800
	= Cost of goods sold / Average Account Inventory
Inventory Turnover ratio	6	Times
Rececivable Turnover ratio
Account Rececivable - Beginning	$500
Account Rececivable - Ending	$700
Average Account Rececivable	$600
Net Sales	$8000
	= Net sales / Average Account Rececivable
Rececivable Turnover ratio	13.33	Times
Average collection period
	= 365 / Rececivable Turnover ratio
	27.38	Days
Assets Turnover ratio
Total Assets - Beginning	$3700
Total Assets - Ending	$4300
Average Total Assets	$4000
Net Sales	$8,000
	= Net sales / Average total Assets
Assets Turnover ratio	2	Times