Foundations of Business - Standalone book (MindTap Course List)
4th Edition
ISBN: 9781285193946
Author: William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 15, Problem 24CC
Summary Introduction
To determine: Explaining the calculation procedures and significance of return on sales, the current ratio and inventory turnover.
Introduction: The current ratio or financial ratio that measures an organization's capacity to pay off its present obligations with current assets. Administration and outside clients examine this ratio to evaluate the liquidity of the organization and additionally its proficiency.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Plum Corporation began the month of May with $1,500,000 of current assets, a current ratio of 1.90:1, and an acid-test ratio of 1.30:1.
During the month, it completed the following transactions (the company uses a perpetual inventory system).
May 2 Purchased $75,000 of merchandise inventory on credit.
May 8 Sold merchandise inventory that cost $55,000 for $125,000 cash.
May 10 Collected $25,000 cash on an account receivable.
May 15 Paid $31,500 cash to settle an account payable.
May 17 Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account.
May 22 Declared a $1 per share cash dividend on its 65,000 shares of outstanding common stock.
May 26 Paid the dividend declared on May 22.
May 27 Borrowed $115,000 cash by giving the bank a 30-day, 10% note.
May 28 Borrowed $145,000 cash by signing a long-term secured note.
May 29 Used the $260,000 cash proceeds from the notes to buy new machinery.
Required:
Complete the table below showing Plum's
(1) current ratio,
(2)…
The average days account receiveable/ days of inventory?
what is the rate of return when 10 shares of stock a, purchased for $30/share and sold for $380? the commission on the sale is $6
Chapter 15 Solutions
Foundations of Business - Standalone book (MindTap Course List)
Ch. 15 - Prob. 1CCCh. 15 - Prob. 2CCCh. 15 - Prob. 3CCCh. 15 - Prob. 4CCCh. 15 - Prob. 5CCCh. 15 - Prob. 6CCCh. 15 - Prob. 7CCCh. 15 - Prob. 8CCCh. 15 - Prob. 9CCCh. 15 - Prob. 10CC
Ch. 15 - Prob. 11CCCh. 15 - Prob. 12CCCh. 15 - Prob. 13CCCh. 15 - Prob. 14CCCh. 15 - Prob. 15CCCh. 15 - Prob. 16CCCh. 15 - Prob. 17CCCh. 15 - Prob. 18CCCh. 15 - Prob. 19CCCh. 15 - Prob. 20CCCh. 15 - Prob. 21CCCh. 15 - Prob. 22CCCh. 15 - Prob. 23CCCh. 15 - Prob. 24CCCh. 15 - Prob. 1DQCh. 15 - Prob. 2DQCh. 15 - Prob. 3DQCh. 15 - Prob. 4DQCh. 15 - Prob. 5DQCh. 15 - Prob. 6DQ
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, marketing and related others by exploring similar questions and additional content below.Similar questions
- Advantages of preparing cash budget would not include one of the following: a. Debtors of the business can be allowed more time to make payment b. If shortage of cash is expected, overdraft facility can be arranged c. Surplus cash can be put to profitable uses if surplus is expected to occur d. Time is available to identify the future sources of finance ------fast plzarrow_forwardClassify each of the following items as revenues (R), expenses (EX), or withdrawals (W). Consulting revenuearrow_forwardNavajo Company's year-end financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Year 1 ending inventory is understated by $69,000 and Year 2 ending inventory is overstated by $39,000. For Year Ended December 31 (a) Cost of goods sold (b) Net income (c) Total current assets (d) Total equity Year 1 $ 744,000 Year 2 $ 974,000 287,000 1,266,000 1,406,000 294,000 1,379,000 1,599,000 Year 3 $ 809,000 269,000 1,249,000 1,264,000 Required: 1. For each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts. 2. What is the total error in combined net income for the three-year period resulting from the inventory errors? Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments…arrow_forward
- Suppose the business receives the revenue at the end of the month, what is the CLV value computed from the initial assumption? (Keep 2 decimal places, no $ sign). A 1 Chum Rate 2 Retention Rate 3 Interest Rate 4 Profit Growth Rate month 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 M 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Skip question 0.25 CLV per customer (Net Present Value $ 0.75 Converting to beginning of period 0.15 $ 0 MeanProfit (if still here) Number of Customers in Cohort (100.00) 30.00 30.00 30.00 30.00 30.00 30.00 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ 7 $ 8 $ 9 $ 10 $ 11 $ 12 $ 13 $ 14 $ 15 $ 16 $ 17 $ 18 $ 19 $ 20 $ 21 $ 22 $ 23 $ 24 $ 25 $ 26 $ 27 $ 28 $ 29 $ 30 $ Start Solving 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 Exit Profit 1000 $ (100,000.00) 979 $ 29,375.00 28,763.02 28,163.79 27,577.05 27,002.52 26,439.97 25,889.14 25,349.78 24,821.66 24,304.54 23,798.20 23,302.40 22,816.94…arrow_forwardIn this document Critically analyze The Coca Cola’s Company corporate policy for funding the business operations, expansion, growth, and value creation and write 200 words ?arrow_forwardAnnie bought one dozen smartphones for 200,000 pesos with a discount of 5%. She sold half dozen at a price of 18,000 pesos per unit. However, a new model of smartphone became available in the market, so she sold the remaining half dozen at 12,000 pesos each unit. What was her profit or loss? Compute the following requirements: a. Gross profit rate b. Operating profit margin rate c. Net profit margin rate d. Return on investmentarrow_forward
- Company XYZ is strictly a service company and does not carry any inventory on its balance sheet. Based on this, which of the ratios below will be of no interest to a financial analyst? Quick Ratio Current Ratio Debt to Equity Ratio Cash Coverage Ratioarrow_forwardConsider a firm with an annual net income of $20 million, revenue of $60 million and cost of goods sold of $30 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment. a) What is the inventory turnover? b) How many weeks of supply does the firm hold?arrow_forwardKelley, Inc. provided the following account balances for 2018: Cost of Goods Sold (Cost of sales) Beginning Merchandise Inventory Ending Merchandise Inventory $1,300,000 330,000 350.000 Calculate the average number of days that inventory was held by Kelley, Inc. during 2018. (Assume 365 days in a year. Round your intermediate calculations and final answer to two decimal places.) O A. 191.10 days O B. 92.64 days O C. 95.55 days O D. 98.38 daysarrow_forward
- Retailer Budget D. Tomlinson Retail seeks your assistance in developing cash and other budgetinformation for May, June, and July. The store expects to have the following balances at the end ofApril:Cash $ 5,500Accounts receivable 437,000Inventories 309,400Accounts payable 133,055The firm follows these guidelines in preparing its budgets:∙ Sales. All sales are on credit with terms of 3/10, n/30. Tomlinson bills customers on the last day ofeach month. The firm books receivables at gross amounts and collects 60% of the billings withinthe discount period, 25% by the end of the month, and 9% by the end of the second month. Thefirm’s experience suggests that 6% is likely to be uncollectible and is written off at the end of thethird month.∙ Purchases and expenses. All purchases and expenses are on open account. The firm pays its payables over a 2-month period with 54% paid in the month of purchase. Each month’s units of endinginventory should equal 130% of the next month’s cost of sales. The…arrow_forwardCompare and contrast the four primary functions of a DC: accumulation, sortation, allocation, and assortment?arrow_forwardThe residual dividend theory suggests that: a. Firms should pay dividends only if the net income is higher than firm capital needs b. Dividends should be paid if Net Income -Debt Ratio*Capital Budget is positive c. Dividend should be paid if Net Income - % Equity in Capital Structure*Capital Budget is greater than zero d. Dividends should be paid on the basis of a constant payout ratio e. Dividends should be paid if free cash flows to the firm are positivearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Foundations of Business (MindTap Course List)MarketingISBN:9781337386920Author:William M. Pride, Robert J. Hughes, Jack R. KapoorPublisher:Cengage Learning
Foundations of Business - Standalone book (MindTa...MarketingISBN:9781285193946Author:William M. Pride, Robert J. Hughes, Jack R. KapoorPublisher:Cengage Learning
Foundations of Business (MindTap Course List)
Marketing
ISBN:9781337386920
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning
Foundations of Business - Standalone book (MindTa...
Marketing
ISBN:9781285193946
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning