Pearson Etext For Foundations Of Finance -- Combo Access Card (10th Edition)
10th Edition
ISBN: 9780135639344
Author: Arthur J. Keown, John D Martin, J. William Petty
Publisher: PEARSON
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Chapter 17, Problem 8SP
a)
Summary Introduction
To determine: Average investment in inventory
b)
Summary Introduction
To determine: Average investment in inventory
c)
Summary Introduction
To determine: Average investment in inventory
d)
Summary Introduction
To determine: Average investment in inventory
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Consider the operations of a manufacturing company that operates 340 days a year, On average it takes 55 days to sell a piece of
inventory. All its products are marked up by 12%; vendors are paid cash, sales are cash and all capital is borrowed @ 32 %. Answer the
following as indicated.
Case 1:
The invnetory turnover ratio, ITR =
The annual rate of return on capital after interest payment =
Case 2:
Now suppose that it pays its vendors after approximayely 12 days.
Under this change, the annual rate of return on capital after interest payment
Suppose you manage a company, which presents the following financial indicators:
Current Ratio: 2
Average Collection Period: 76.3 days
Inventory Turnover: 6.7
Operating Income Return on Investment: 13.2%
Debt Ratio: 32%
The competition has the following results:
Current Ratio: 2
Average Collection Period: 35 days
Inventory Turnover: 6.7
Operating Income Return on Investment:10%
Debt Ratio: 60%
How is the financial situation of your company? Justify your answer.
PLease show Solutions for a guide.
1. A firm total sales is 156,000 this year. If the cost of sales is 55% . What is the amount of gross profit?
2. If the firm above earned a profit of 39,000 . How many percent of total sales is the net profit?
3. Compute for the operating expenses of the firm 1 and 2. How many percent of the total sales are the operating expenses?
Chapter 17 Solutions
Pearson Etext For Foundations Of Finance -- Combo Access Card (10th Edition)
Ch. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - What are the two major objectives of the firms...Ch. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - Prob. 10RQ
Ch. 17 - Prob. 11RQCh. 17 - Prob. 1SPCh. 17 - Prob. 2SPCh. 17 - Prob. 3SPCh. 17 - (Interest rate risk) Two years ago your corporate...Ch. 17 - Prob. 6SPCh. 17 - Prob. 7SPCh. 17 - Prob. 8SPCh. 17 - Prob. 9SPCh. 17 - Prob. 10SPCh. 17 - Prob. 11SPCh. 17 - Prob. 1MCCh. 17 - Prob. 2MCCh. 17 - Prob. 3MCCh. 17 - Prob. 4MC
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