(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.
(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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Simon Company’s year-end
| At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago | ||||||||
| Assets | |||||||||||
| Cash | $ | 30,328 | $ | 35,451 | $ | 36,196 | |||||
| 89,000 | 62,300 | 51,200 | |||||||||
| Merchandise inventory | 113,500 | 83,500 | 56,000 | ||||||||
| Prepaid expenses | 9,767 | 9,306 | 4,022 | ||||||||
| Plant assets, net | 266,348 | 248,187 | 214,582 | ||||||||
| Total assets | $ | 508,943 | $ | 438,744 | $ | 362,000 | |||||
| Liabilities and Equity | |||||||||||
| Accounts payable | $ | 127,994 | $ | 74,889 | $ | 48,262 | |||||
| Long-term notes payable secured by mortgages on plant assets |
96,638 | 101,920 | 80,802 | ||||||||
| Common stock, $10 par value | 162,500 | 162,500 | 162,500 | ||||||||
| 121,811 | 99,435 | 70,436 | |||||||||
| Total liabilities and equity | $ | 508,943 | $ | 438,744 | $ | 362,000 | |||||
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 | Current Yr | 1 Yr Ago | ||||||||||
| Sales | $ | 661,626 | $ | 522,105 | ||||||||
| Cost of goods sold | $ | 403,592 | $ | 339,368 | ||||||||
| Other operating expenses | 205,104 | 132,093 | ||||||||||
| Interest expense | 11,248 | 12,008 | ||||||||||
| Income tax expense | 8,601 | 7,832 | ||||||||||
| Total costs and expenses | 628,545 | 491,301 | ||||||||||
| Net income | $ | 33,081 | $ | 30,804 | ||||||||
| Earnings per share | $ | 2.04 | $ | 1.90 | ||||||||
(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.
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