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The 2018 income statement of Anderson Medical Supply Company reported net sales of $8 million, cost...

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

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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
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