Calculate the company's inventory turnover for 2020 and compare the result to the industry average.
Calculate the company's inventory turnover for 2020 and compare the result to the industry average.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.4.4P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...
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Inventory Turnover
Calculate the company's inventory turnover for 2020 and compare the result to the industry average.
![Assignments with the ne logo in the margin are available in BusinessCourse.
See the Preface of the book for details.
SHORT EXERCISES
Use the following financial data for Hi-Tech Instruments to answer Short Exercises 12-1 through 12-10:
2020 (Thousands of Dollars, except Earnings per Share)
Sales revenue.
$210,00o
125,000
Cost of goods sold
Net income .
8,300
2,600
Dividends
Earnings per share.
4.15
HI-TECH INSTRUMENTS, INc.
Balance Sheets
(Thousands of Dollars)
Dec. 31, 2020
Dec. 31, 2019
Assets
Cash
$
,300
$ 18,000
Accounts receivable (net)
Inventory.
46,000
41,000
39,500
43,700
Total Current Assets
103,800
52,600
102,700
Plant assets (net)
50,500
Other assets
15,600
13,800
Total Assets
$172,00O
$167,000
continued](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ba8d2f4-1578-41b8-b06f-5701357abb5d%2Fce9211b9-db5e-4dd9-ae1c-fa42f3e49704%2Ftsh7ezs_processed.png&w=3840&q=75)
Transcribed Image Text:Assignments with the ne logo in the margin are available in BusinessCourse.
See the Preface of the book for details.
SHORT EXERCISES
Use the following financial data for Hi-Tech Instruments to answer Short Exercises 12-1 through 12-10:
2020 (Thousands of Dollars, except Earnings per Share)
Sales revenue.
$210,00o
125,000
Cost of goods sold
Net income .
8,300
2,600
Dividends
Earnings per share.
4.15
HI-TECH INSTRUMENTS, INc.
Balance Sheets
(Thousands of Dollars)
Dec. 31, 2020
Dec. 31, 2019
Assets
Cash
$
,300
$ 18,000
Accounts receivable (net)
Inventory.
46,000
41,000
39,500
43,700
Total Current Assets
103,800
52,600
102,700
Plant assets (net)
50,500
Other assets
15,600
13,800
Total Assets
$172,00O
$167,000
continued
![continued from previous page
HI-TECH INSTRUMENTS, INC.
Balance Sheets
(Thousands of Dollars)
Dec. 31, 2020
Dec. 31, 2019
Liabilities and Stockholders' Equity
Notes payable-banks
Accounts payable.
$
22,500
6,000
6,000
18,700
Accrued liabilities
16,500
21,000
45,000
40,000
Total Current Liabilities
45,700
9% Bonds payable
40,000
Total Liabilities.
85,000
85,700
Common stock, $25 par value (2,000,000 shares).
Retained earnings
50,000
37,000
50,000
31,300
Total Stockholders' Equity.
87,000
81,300
Total Liabilities and Stockholders’ Equity
$172,00o
$167,00O
Industry Average Ratios for Competitors
Quick ratio
1.3
Current ratio
2.4
Accounts receivable turnover
5.9 times
Inventory turnover.
Debt-to-equity ratio.
Gross profit percentage
Profit margin.
Return on assets
3.5 times
0.73
42.8 percent
4.5 percent
7.6 percent](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ba8d2f4-1578-41b8-b06f-5701357abb5d%2Fce9211b9-db5e-4dd9-ae1c-fa42f3e49704%2Fwow2y4_processed.png&w=3840&q=75)
Transcribed Image Text:continued from previous page
HI-TECH INSTRUMENTS, INC.
Balance Sheets
(Thousands of Dollars)
Dec. 31, 2020
Dec. 31, 2019
Liabilities and Stockholders' Equity
Notes payable-banks
Accounts payable.
$
22,500
6,000
6,000
18,700
Accrued liabilities
16,500
21,000
45,000
40,000
Total Current Liabilities
45,700
9% Bonds payable
40,000
Total Liabilities.
85,000
85,700
Common stock, $25 par value (2,000,000 shares).
Retained earnings
50,000
37,000
50,000
31,300
Total Stockholders' Equity.
87,000
81,300
Total Liabilities and Stockholders’ Equity
$172,00o
$167,00O
Industry Average Ratios for Competitors
Quick ratio
1.3
Current ratio
2.4
Accounts receivable turnover
5.9 times
Inventory turnover.
Debt-to-equity ratio.
Gross profit percentage
Profit margin.
Return on assets
3.5 times
0.73
42.8 percent
4.5 percent
7.6 percent
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