Adams Furniture has a quick ratio of 2.00x, $37,575 in cash, $20,875 in accounts receivable, some inventory, total current assets of$83,500, and total current liabilities of $29,225. The company reported annual sales of $100,000 in the most recent annual report.Over the past year, how often did Adams Furniture sell and replace its inventory?O 2.86xO 4.39xO 8.01xO 3.99xThe inventory turnover ratio across companies in the furniture industry is 4.389x. Based on this information, which of the following statements istrue for Adams Furniture?O Adams Furniture is holding less inventory per dollar of sales compared with the industry average.O Adams Furniture is holding more inventory per dollar of sales compared with the industry average.You are analyzing two companies that manufacture electronic toys-Like Games Inc. and Our Play Inc. Like Games was launched eight years ago,whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal marketshare with sales of $100,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all industrycompetitors was $255,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year.You've collected data from the companies' financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.) You are analyzing two companies that manufacture electronic toys-Like Games Inc. and Our Play Inc. Like Games was launched eight years ago,whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal marketshare with sales of $100,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all industrycompetitors was $255,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year.You've collected data from the companies' financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.)Accounts receivableNet fixed assetsTotal assetsData Collected (in dollars)Like Games Our Play Industry Average3,9003,85080,000216,750125,000234,6002,70055,00095,000Using this information, complete the following statements to include in your analysis.1. A days of sales outstanding represents an efficient credit and collection policy. Between the two companies,cash from its customers faster than2. Our Play's fixed assets turnover ratio isacquisition cost of its fixed assets isis collecting,but both companies are collecting their receivables less quickly than the industry average.than that of Like Games. This could be because Our Play is a relatively new company, so thethan the recorded cost of Like Games's net fixed assets.which is3. Like Games's total assets turnover ratio ishigher total assets turnover ratio indicates greater efficiency.than the industry's average total assets turnover ratio. In general, a

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Adams Furniture has a quick ratio of 2.00x, $37,575 in cash, $20,875 in accounts receivable, some inventory, total current assets of $83,500, and total current liabilities of $29,225. The company reported annual sales of $100,000 in the most recent annual report. ver the past year, how often did Adams Furniture sell and replace its inventory? O 2.86x O 4.39x O 8.01x Q3.99x

Adams Furniture has a quick ratio of 2.00x, $37,575 in cash, $20,875 in accounts receivable, some inventory, total current assets of $83,500, and total current liabilities of $29,225. The company reported annual sales of $100,000 in the most recent annual report. ver the past year, how often did Adams Furniture sell and replace its inventory? O 2.86x O 4.39x O 8.01x Q3.99x

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Adams Furniture has a quick ratio of 2.00x, $37,575 in cash, $20,875 in accounts receivable, some inventory, total current assets of $83,500, and total current liabilities of $29,225. The company reported annual sales of $100,000 in the most recent annual report. Additionally, the company’s cost of goods sold is 75% of sales. Over the past year, how often did Adams Furniture sell and replace its inventory? 8.01x 3.29x 2.86x 2.99x
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