company’s inventory expressed as a percentage of current assets increased from 25% last November to 35% this November. The factor that is least likely to cause this increase is that the corporation a. Has inventory that is becoming obsolete. b. Is a seasonal company with traditionally higher activity in the winter months. c. Used a material amount of cash from selling its short-term investments to purchase land. d. Is beginning to experience high growth.

company’s inventory expressed as a percentage of current assets increased from 25% last November to 35% this November. The factor that is least likely to cause this increase is that the corporation a. Has inventory that is becoming obsolete. b. Is a seasonal company with traditionally higher activity in the winter months. c. Used a material amount of cash from selling its short-term investments to purchase land. d. Is beginning to experience high growth.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 3Q

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Question

A company’s inventory expressed as a percentage of current assets increased from 25% last November to 35% this November. The factor that is least likely to cause this increase is that the corporation

a. Has inventory that is becoming obsolete.

b. Is a seasonal company with traditionally higher activity in the winter months.

c. Used a material amount of cash from selling its short-term investments to purchase land.

d. Is beginning to experience high growth.

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Jiang Ltd has recently produced its financial statements for the current year. The directors of the company are concerned that the return on capital employed (ROCE) has decreased from 14% last year to 12% for the current year.The following reasons were suggested as to why this reduction in ROCE has occurred. an increase in the gross profit margin a reduction in sales revenue an increase in overhead expenses an increase in amount of inventories held the repayment of a loan at the end of the year an increase in time taken for trade receivables to be paid Taking each of these 6 suggested reasons in turn, state, with reasons, whether each of them could lead to a reduction in ROCE ROCE = (EBIT/Sales Revenue) x (Sales revenue/Long term capital)
Subject :- Accounting
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Financial data for Joel de Paris, Incorporated, for last year follow: Joel de Paris, Incorporated Balance Sheet Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity Joel de Paris, Incorporated Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income $ 121,000 207,000 $4,416,000 3,665,280 750,720 328,000 $ 422,720 Beginning Balance $ 136,000 339,000 568,000 857,000 395,000 251,000 $ 2,546,000 Ending Balance $ 131,000 479,000 488,000 842,000 435,000 253,000 $ 2,628,000 $ 349,000 $ 374,000 983,000 1,189,000 983,000 1,296,000 $ 2,546,000 $ 2,628,000 The company paid dividends of $315,720 last year. The “Investment in Buisson, S.A.," on the balance sheet represents an investment in the stock of another company. The…
Question
Over the past year, M.D. Ryngaert & Co. has realized an increase in its current ration and a drop in its total assets turnover ratio. However, the company’s sales, quick ration, and fixed assets turnover ratio have remained constant. What explains these changes?
17 The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 35 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Sales Expenses Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends. Income Statement: Cash Accounts receivable. Inventory Fixed assets Assets Current assets Total assets The firm $230,000 168,500 $ 61,500 9,500 $ 52,000 17,500 $ 34,500 $ 13,800 Balance Sheet Liabilities and Stockholders' Equity $6,500 42,000 Accrued wages 55,000 Accrued taxes $ 103,500 90,000 Accounts payable Current liabilities Notes payable Long-term debt Common stock Retained…