Question

Current Yr 1 Yr Ago 2 Yrs Ago At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 31,953 89,200 110,500 10,290 310.679 $552,622 $ 37,350 $ 39, 303 62,900 51.900 84,000 55,000 9.804 4.367 282,344 254,530 $ 476,398 $ 405,100 $134,851 $ 78,901 $ 52,404 101,815 162,500 153,456 $552,622 107,380 87,737 162,500 162,500 127,617 102,459 $ 476,398 $ 405,100 The company's income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit: For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income tax expense Total costs and expenses Net income Current Yr $ 718,409 $ 438, 229 222,707 12,213 9.339 682,488 $ 35,921 2.21 1 Yr Ago $ 566,914 $ 368, 494 143,429 13,039 8,504 533,466 s 33.448 Earnings per share $ 2.06 (1-a) Compute days' sales uncollected. (1-b) For each ratio, determine if it improved or worsened in the current year. Compute days' sales uncollected. Days' Sales Uncollected 1 Choose Denominator: Choose Numerator: x Days - = Days' Sales Uncollected Days' Sales Uncollected o days o days Current Yr: 1 Yr Ago: (2-a) Compute accounts receivable turnover. (2-b) For each ratio, determine if it improved or worsened in the current year. Required 2A Required 28 Compute accounts receivable turnover. Accounts Receivable Turnover 7 Choose Denominator: Choose Numerator: = Accounts Receivable Turnover Accounts receivable turnover times Current Yr: 1 Yr Ago: times (3-a) Compute inventory turnover. (3-b) For each ratio, determine if it improved or worsened in the current year. Required 3A Required 3B Compute inventory turnover. Inventory Turnover Choose Numerator: 7 Choose Denominator: = Inventory Turnover Inventory turnover times Current Yr: 1 Yr Ago: times (4-a) Compute days' sales in inventory (4-6) For each ratio, determine if it improved or worsened in the current year Required 4A Required 48 Compute days' sales in inventory Days' Sales In Inventory Choose Denominator: Choose Numerator: 7 Days - Days' Sales In Inventory Days' sales in inventory Current Yr: 1 Yr Ago: days

Answer 1

Requirement: 1a Years X Numerator Accounts Receivable 89200 62900 Days sales Uncollected Denominator / Net Sales 718409 7 566914 Days 365 365 365 = = = = Days Sales Uncollected Days Sales Uncollected 45.3 days 40.5 days 1 Current Year 1 Year Ago x x Requirement: 1 a Worsed Requirement: 2a Year Accounts Recievable Turn over ratio Denominator 7 Average Account Recievable 76050 1 57400 Numerator Net Credit sales 718409 566914 = = | Account Recievable ratio Account Recievable ratio 9.4 times 9.9 times Current Year 1 Year Ago Requirement: 2b Worsed

Requirement: 3a Year Numerator Cost of goods sold 438229 368494 Inventory turn over ratio Denominator 1 Average Inventory 97250 69500 Inventory Turn over ratio Inventory Turn over ratio 4.5 times 5.3 times Current Year 1 Year Ago Requirement: 3b Worsed Requirement: 4a Year Numerator Ending Inventory 110500 84000 Days Sales in inventory 1 Denominator 1 Cost of goods sold 438229 368494 X x x X Days 365 365 365 = = = Days Sales in inventory Days Sales in inventory 92.0 days 83.2 days Current Year 1 Year Ago Requirement: 4b Worsed