LET'S BUY A NURSERY After years of saving, learning, investing, and preparing, you're ready to make the big leap and purchase an existing nursery. You’ve narrowed your choices to two: Plants 'n Growin’ Things and When It Grows. As the next step, you will assess the ratios to further narrow your decision. Plants 'n Growin' Things Nursery When It Grows Nursery Return on Sales Net income after taxes: $59,000 Net sales: $190,000 Return on sales: Net income after taxes: $209,000 Which nursery is doing better? Net sales: $980,000 Return on sales: Current Ratio Current assets: $289,000 Current liabilities: $178,000 Current ratio: Current assets: $499,000 Which nursery is doing better? Current liabilities: $388,000 Current ratio: Cost of goods sold: $121,000 Average inventory: $22,000 Inventory turnover: Inventory Turnover Which nursery is doing better?|Average inventory: $90,000 Cost of goods sold: $688,000 Inventory turnover: After calculating the above ratios and determining which nursery is doing better in each individual ratio, which nursery are you most interested in? Why?

LET'S BUY A NURSERY After years of saving, learning, investing, and preparing, you're ready to make the big leap and purchase an existing nursery. You’ve narrowed your choices to two: Plants 'n Growin’ Things and When It Grows. As the next step, you will assess the ratios to further narrow your decision. Plants 'n Growin' Things Nursery When It Grows Nursery Return on Sales Net income after taxes: $59,000 Net sales: $190,000 Return on sales: Net income after taxes: $209,000 Which nursery is doing better? Net sales: $980,000 Return on sales: Current Ratio Current assets: $289,000 Current liabilities: $178,000 Current ratio: Current assets: $499,000 Which nursery is doing better? Current liabilities: $388,000 Current ratio: Cost of goods sold: $121,000 Average inventory: $22,000 Inventory turnover: Inventory Turnover Which nursery is doing better?|Average inventory: $90,000 Cost of goods sold: $688,000 Inventory turnover: After calculating the above ratios and determining which nursery is doing better in each individual ratio, which nursery are you most interested in? Why?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 11E

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