Chapter 18, Problem 18.10E

To determine

Inventory Turnover: It is a part of liquidity ratios used during the process of ratio analysis. It reflects the number of times a company’s inventory is converted into sale during a particular period.

Return on Common Stockholders’ Equity: It is a measure of net income available to common stockholders of the company. A company’s rate of return on equity shows the amount earned for each dollar invested by the common stockholders.

Accounts Receivable Turnover: A measure of ability to collect account receivables, account receivable turnover reports the net credit sales as the times of average account receivables. It reflects the efficiency in account receivable collection.

Return on Assets: It is a measure to evaluate the efficiency of company’s assets. It reports the profit earned as the percentage of total assets used in the business. A company’s rate of return on total assets reflects its ability to optimize the use of total assets.

To compute: (a). The cost of goods sold (b).net sales (credit) (c).net income (d) total assets of Company L.