Question

Reference the ratios below: Wiltsire Car Mfg. Company           Auto Industry Year 3 Year 2 Year 1...

Reference the ratios below:

Wiltsire Car Mfg. Company

          Auto Industry

Year 3

Year 2

Year 1

Year 3

Year 2

Year 1

Current Ratio

1.5

1.3

1.2

2.1

2.2

    2.2

Debt Ratio

0.5

0.4

0.3

0.2

0.2

    0.2

Debt-Equity Ratio

0.9

0.7

0.6

0.4

0.4

    0.5

Times Interest Earned

6.1

5.9

3.2

8.5

7.9

    7.4

Inventory Turnover

8.2

7.4

7.2

9.0

7.5

    6.5

Fast Car’s inventory turnover is:

a.

Unchanged over time

b.

Improving over time

c.

Getting worse over time

d.

Not determinable based on information provided

e.

Better than its industry

Becker Co., presents the following data, in millions, for Year 3.

Ending Receivables, net ( allowances $23 million)

$  1,015

Net Sales

42,879

Cost of Goods Sold

32,918

The days' sales in receivables (average collection period) is

a.

8.8

b.

0.11

c.

8.6

d.

9.4

e.

11.5

  1. Reference the ratios below:

    Wiltshire Car Mfg. Company

              Auto Industry

    Year 3

    Year 2

    Year 1

    Year 3

    Year 2

    Year 1

    Current Ratio

    1.5

    1.3

    1.2

    2.1

    2.2

        2.0

    Debt Ratio

    0.5

    0.4

    0.3

    0.2

    0.2

        0.2

    Debt-Equity Ratio

    0.9

    0.7

    0.6

    0.4

    0.4

        0.5

    Times Interest Earned

    6.1

    5.9

    3.2

    8.5

    7.9

        7.4

    Inventory Turnover

    8.2

    7.9

    7.2

    9.0

    7.5

        6.5

    Wiltshire Car Mfg. Company liquidity situation is:

    a.

    Getting stronger over time

    b.

    Getting weaker over time

    c.

    Not determinable based on information provided

    d.

    Unchanged over time

    e.

    Stronger than its industry

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Answer #1

Date: Answer 1. b. Improving over time. tast Car Inventory tomover rauto is increasing threby Indicating the increase in Nube

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