When analyzing financial statements, what can you conclude when the inventory turnover ratio increases from 4.0...
- When analyzing financial statements, what can you conclude when
the inventory turnover ratio increases from 4.0 to 6.0 over a three
year period.
- The day’s inventory held are within the typical industry average
- The day’s inventory held has increased over time
- The day’s inventory held has decreased over time
- When analyzing financial statements, what can you conclude when
the accounts receivable turnover ratio decreases from 9.0 to 6.0
over a three year period.
- Collections are within standard terms
- The collection period has increased over time
- The collection period has decreased over time
- When analyzing financial statements, what can you conclude when the accounts payable turnover ratio is 9.0 for the current year and 12.0 for prior years _______________________________________________________________________________________________________
- When analyzing the Statement of Cash Flows, what can you conclude when there is a negative cash flow from operations, positive cash flow from investing (sale of fixed assets) and a positive cash flow from financing (borrowing from banks)_____________________________________________________________________________________________________________
Homework Answers
When analyzing financial statements, what can you conclude when the inventory turnover ratio increases from 4.0 to 6.0 over a three year period.
Answer is (c) The day’s inventory held has decreased over time
When analyzing financial statements, what can you conclude when the accounts receivable turnover ratio decreases from 9.0 to 6.0 over a three year period.
Answer is (b) The collection period has increased over time
When analyzing financial statements, what can you conclude when the accounts payable turnover ratio is 9.0 for the current year and 12.0 for prior years
It suggest that payment period has decreased over time.
When analyzing the Statement of Cash Flows, what can you conclude when there is a negative cash flow from operations, positive cash flow from investing (sale of fixed assets) and a positive cash flow from financing (borrowing from banks)
It suggests that since the operations is not generating cash, so company is heading towards sale of investments / PPE and raising loans from bank to generate cash for liquidity. It also suggests that company is not able to convert accounts receivables and inventory into cash.
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When analyzing financial statements, what can you conclude when
the inventory turnover ratio increases from 4.0...
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