current ratio?
average collection period?
days sales in inventory?
debt ratio?
profit margin?
Homework Answers
Current ratio
Current ratio = Total current assets / Total current liabilities
= [$12,100 + $6,100 + $13,500 + $3,000] / [$11,500 + $2,600 + $3,300]
= $34,700 / $17,400
= 1.99 Times
Average collection period
Average collection period = Accounts receivables / Sales per day
= $12,100 / [$315,500 / 365 days]
= $12,100 / $864.38
= 14.00 Days
Days sales in inventory
Days sales in inventory = Inventory / Cost of goods sold per day
= $13,500 / [$236,100 / 365 Days]
= $13,500 / $646.85 per day
= 20.87 Days
Debt ratio
Debt ratio = Total Liabilities / Total Assets
= [Total current liabilities + Long-term debt] / Total assets
= [$17,400 + $30,000] / $117,500
= $47,400 / $117,500
= 0.4034 or
= 40.34%
Profit margin
Profit margin = [Net Income / Total assets] x 100
= [$23,800 / $315,500] x 100
= 7.54%
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current ratio?average collection period?days sales in inventory?debt ratio?profit margin?Use the following...
calculate current ratio, average collection period, debt ratio, net profit margin and inventory turnover ratio. Rachel...
calculate
current ratio, average collection period, debt ratio, net profit
margin and inventory turnover ratio.
Rachel Company Balance Sheet and selected Income Statement data $300,000 2,215,000 1,837,500 24,000 $3,286,500 2,700,000 1,087,500 $1,612,500 $4.899,000 Assets: Cash and marketable securities Accounts receivable Inventories Prepaid expenses Total current assets Fixed assets Less: accumulated depreciation Net fixed assets Total assets Liabilities: Accounts payable Notes payable Accrued taxes Total current liabilities Long-term debt Owner's equity Total liabilities and owner's equity Net sales (all credit) Less:...
Current ratio = 2.6 times Credit sales $1,314m Average collection period 50 days Inventory turnover 1.50...
Current ratio = 2.6 times Credit sales $1,314m Average collection period 50 days Inventory turnover 1.50 times Total asset turnover 0.50 times Debt ratio 75% Use the above information to complete the balance sheet below. (Enter your answer in millions. Use 365 days a year.) Cash million million Current liabilities Accounts receivable $ 670 million million Long-term debt Inventory million 0 million Total debt Current assets 670 million million Stockholders' equity million 670 million Fixed assets $ 0 million Total...
Ratio (1) Current ratio (2) Accounts receivable turnover (3) Average collection period (4) Inventory turnover (5)...
Ratio (1) Current ratio (2) Accounts receivable turnover (3) Average collection period (4) Inventory turnover (5) Days in inventory (6) Profit margin (7) Asset turnover (8) Return on assets (9) Return on common stockholders' equity (10) Debt to assets ratio (11) Times interest earned (12) Free cash flow Target 1.63 :1 8.6 times 42.0 days 6.6 times 55.3 days 3.8 % 1.5 times 5.6 % 17.1 % 66 % 6.5 times $3,656 Wal-Mart 0.87 :1 101.4 times 3.6 days 9.0...
Long-term debt ratio Times interest earned Current ratio Quick ratio Cash ratio Inventory turnover Average collection...
Long-term debt ratio Times interest earned Current ratio Quick ratio Cash ratio Inventory turnover Average collection period 0.6 5.0 73 days Use the above information from the tables to work out the following missing entries, and then calculate the company's return on equity. Note: Turnover and the average collection period are calculated using start-of-year, not average, values. (Enter your answers in millions. Round intermediate calculations and final answers to 2 decimal places.) INCOME STATEMENT (Figures in $ millions) Net sales...
Longtere debt ratio Cash ratio Inventory turnover Average collection period Use the above information from the...
Longtere debt ratio Cash ratio Inventory turnover Average collection period Use the above information from the tables to work out the following missing entries, and then calculate the company's return on equity. Note: Turnover and the average collection period are calculated using start-of-year, not average, values. (Enter your answers in millions. Round Intermediate calculations and final answers to 2 decimal places.) INCOME STATEMENT (Figures in millions) Cost of goods sold Selling general and administrative expenses Earnings before interest and taxes...
Value options Inventory conversion period: 56.77 days 43.26 days 45.96 days 131.70 days Average collection period:...
Value options
Inventory conversion period:
56.77 days
43.26 days
45.96 days
131.70 days
Average collection period:
34.20 days
23.32 days
86.55 days
29.54 days
Payables deferral period:
62.57 days
49.53 days
54.75 days
127.00 days
Cash conversion cycle:
31.37 days
91.25 days
29.72 days
28.07 days
Then the multiple choices
1. Cash conversion cydle AaAa Consider the case of Green Melon Electronics Company: Green Melon Electronics Company is a mature firm that has a stable flow of business. The following...
BB currently has average collection period of 37 days, annual sales of 330,000 units at a...
BB currently has average collection period of 37 days, annual sales of 330,000 units at a selling price of $30 a piece, and contribution margin $18. It is considering a tightening of credit policy that would reduce average collection period to 21 days and reduce sales to 328,000 units. There are no bad debts, and BB has required return of 7%. What is the net profit from tightening the credit policy?
(Efficiency analysis) The Brenmar Sales Company had a gross profit margin (gross profits = sales) of...
(Efficiency analysis) The Brenmar Sales Company had a gross profit margin (gross profits = sales) of 28 percent and sales of $8.9 million last year. 78 percent of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal $1.2 million, its current liabilities equal $299,900, and it has $109,300 in cash plus marketable securities. a. If Brenmar's accounts receivable equal $563,300, what is its average collection period? b. If Brenmar reduces its average collection...
(Efficiency analysis) The Brenmar Sales Company had a gross profit margin (gross profits - sales) of...
(Efficiency analysis) The Brenmar Sales Company had a gross profit margin (gross profits ÷ sales) of 34 percent and sales of $8.4 million last year. 70 percent of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal $1.2 million, its current liabilities equal $297,500, and it has $104,400 in cash plus marketable securities. a. If Brenmar's accounts receivable equal $562,000, what is its average collection period? b. If Brenmar reduces its average collection period to...
The Brenmar Sales Company had a gross profit margin (gross profits divided by sales) of 25...
The Brenmar Sales Company had a gross profit margin (gross profits divided by sales) of 25 percent and sales of $ 8.1 million last year. 75 percent of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal $ 1.3 million, its current liabilities equal $ 301300, and it has $ 102900 in cash plus marketable securities. a. If Brenmar's accounts receivable equal $ 562400, what is its average collection period? b. If...
calculate
current ratio, average collection period, debt ratio, net profit
margin and inventory turnover ratio.
Rachel Company Balance Sheet and selected Income Statement data $300,000 2,215,000 1,837,500 24,000 $3,286,500 2,700,000 1,087,500 $1,612,500 $4.899,000 Assets: Cash and marketable securities Accounts receivable Inventories Prepaid expenses Total current assets Fixed assets Less: accumulated depreciation Net fixed assets Total assets Liabilities: Accounts payable Notes payable Accrued taxes Total current liabilities Long-term debt Owner's equity Total liabilities and owner's equity Net sales (all credit) Less:...
Current ratio = 2.6 times Credit sales $1,314m Average collection period 50 days Inventory turnover 1.50 times Total asset turnover 0.50 times Debt ratio 75% Use the above information to complete the balance sheet below. (Enter your answer in millions. Use 365 days a year.) Cash million million Current liabilities Accounts receivable $ 670 million million Long-term debt Inventory million 0 million Total debt Current assets 670 million million Stockholders' equity million 670 million Fixed assets $ 0 million Total...
Ratio (1) Current ratio (2) Accounts receivable turnover (3) Average collection period (4) Inventory turnover (5) Days in inventory (6) Profit margin (7) Asset turnover (8) Return on assets (9) Return on common stockholders' equity (10) Debt to assets ratio (11) Times interest earned (12) Free cash flow Target 1.63 :1 8.6 times 42.0 days 6.6 times 55.3 days 3.8 % 1.5 times 5.6 % 17.1 % 66 % 6.5 times $3,656 Wal-Mart 0.87 :1 101.4 times 3.6 days 9.0...
Long-term debt ratio Times interest earned Current ratio Quick ratio Cash ratio Inventory turnover Average collection period 0.6 5.0 73 days Use the above information from the tables to work out the following missing entries, and then calculate the company's return on equity. Note: Turnover and the average collection period are calculated using start-of-year, not average, values. (Enter your answers in millions. Round intermediate calculations and final answers to 2 decimal places.) INCOME STATEMENT (Figures in $ millions) Net sales...
Longtere debt ratio Cash ratio Inventory turnover Average collection period Use the above information from the tables to work out the following missing entries, and then calculate the company's return on equity. Note: Turnover and the average collection period are calculated using start-of-year, not average, values. (Enter your answers in millions. Round Intermediate calculations and final answers to 2 decimal places.) INCOME STATEMENT (Figures in millions) Cost of goods sold Selling general and administrative expenses Earnings before interest and taxes...
Value options
Inventory conversion period:
56.77 days
43.26 days
45.96 days
131.70 days
Average collection period:
34.20 days
23.32 days
86.55 days
29.54 days
Payables deferral period:
62.57 days
49.53 days
54.75 days
127.00 days
Cash conversion cycle:
31.37 days
91.25 days
29.72 days
28.07 days
Then the multiple choices
1. Cash conversion cydle AaAa Consider the case of Green Melon Electronics Company: Green Melon Electronics Company is a mature firm that has a stable flow of business. The following...
(Efficiency analysis) The Brenmar Sales Company had a gross profit margin (gross profits = sales) of 28 percent and sales of $8.9 million last year. 78 percent of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal $1.2 million, its current liabilities equal $299,900, and it has $109,300 in cash plus marketable securities. a. If Brenmar's accounts receivable equal $563,300, what is its average collection period? b. If Brenmar reduces its average collection...
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