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Italian Marble Co. Brazil Stone Products Total liabilities $ 200,000 $ 100,000 Total assets 800,000 400,000...

Italian Marble Co. Brazil Stone Products
Total liabilities $ 200,000 $ 100,000
Total assets 800,000 400,000
Sales (all on credit) 1,910,000 1,120,000
Average inventory 240,000 140,000
Average receivables 200,000 100,000
Gross profit as a percentage of sales 40 % 30 %
Operating expenses as a percentage of sales 36 % 25 %
Net income as a percentage of sales 3 % 5 %

  

a. Compute the net income for each company.

b. Compute the net income as a percentage of stockholders' equity for each company.

c. Compute the accounts receivable turnover for each company.

d. Compute the inventory turnover for each company.

e. Which company is in a stronger financial position?

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Answer #1

C Nel Income oR ech compo 1120100 Xs S1300 Income as hoedesn egauty S6000 χ 100 3 nccound Receuabee 200000 09 000 18.6 1 1.0

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