Refer to the Sanderson Company information in Exercise 13-7. The company’s income statements for the years ended December 31, 2012 and 2011, follow. Assume that all sales are on credit and then compute: (1) days’ sales uncollected, (2) accounts receivable turnover, (3) inventory turnover, and (4) days’ sales in inventory. Comment on the changes in the ratios from 2011 to 2012. (Round amounts to one decimal.)
For Year Ended December 31 | 2012 | 2011 | ||
Sales |
| $672,500 |
| $530,000 |
Cost of goods sold | $410,225 |
| $344,500 |
|
Other operating expenses | 208,550 |
| 133,980 |
|
Interest expense | 11,100 |
| 12,300 |
|
Income taxes | 8,525 |
| 7,845 |
|
Total costs and expenses |
| 638,400 |
| 498,625 |
Net income |
| $ 34,100 |
| $ 31,375 |
Earnings per share |
| $ 2.10 |
| $ 1.93 |
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