UPENN: LOOSE LEAF CORP.FIN W/CONNECT
17th Edition
ISBN: 9781260361278
Author: Ross
Publisher: McGraw-Hill Publishing Co.
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Question
Chapter 26, Problem 1CQ
Summary Introduction
To explain: The characteristics of the firm having long operating cycle.
Operating Cycle:
Operating cycle is a time period between the sale of a product and the recovery of cash from the customer. Operating cycle is also known as the business cycle, it involves every quantitative business activity of the company.
Expert Solution & Answer
Answer to Problem 1CQ
The following are the characteristics of the firm having long operating cycle.
- Store more inventory
- Pay supplier dues quickly.
- Accounts receivables are high.
Explanation of Solution
- The firm having long operating cycle always maintains a high storage of inventory. By keeping high storage of inventory the inventory turnover of such companies are very low.
- These companies pay cash to accounts payable quickly. As they maintain high storage of inventory, so they are able to sell product to customer every time and this is the reason they easily pay cash to suppliers.
- These companies believe to sell products on credit basis; by this strategy, they have more customer retention and loyalty. As by selling of product on credit basis the accounts receivable account automatically increases the long operating cycle of the company.
Conclusion
Thus, the long operating cycle companies are making a strong planning on the working capital components.
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Listed here, are the 2018 and 2019 balance sheets.
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and income statements,, for Otago Bay Marine Motors, a major manufacturer of top-of-the-line outboard
a. On the basis of the information provided, calculate the following financial ratios for 2018 and 2019:
b. Considering the financial ratios you computed, along with the industry averages, how would you characterize the financial condition of Otago Bay Marine Motors?
Explain.
a. Calculate the following financial ratios for 2018 and 2019. (Round to two decimal places.)
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2019
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I need to get more details by doing homeworks and exams.
Use the financial statement of DKT Enterprise provided above to calculate the ratio for 2024 that reflects each of the following conditions (where applicable, round off answers to two decimal places.):
1. The percentage of DKT Enterprises' revenue that remained after accounting for the cost of goods sold.
2. The percentage of DKT Enterprises' revenue that remained after all expenses, including operating costs, interest, and taxes, have been deducted.
3. The extent to which DKT Enterprises' short-term liabilities, were covered by assets that could be quickly converted into cash during the year.
4. The ratio of DKT Enterprises' liquid assets to its current liabilities, indicating the company's ability to meet short-term obligations without relying on inventory.
5. The percentage of the profit DKT Enterprises generated from its total assets during the year, reflecting how efficiently it utillises its asset base to generate earnings.
6. The percentage of the profit for the year relative…
Chapter 26 Solutions
UPENN: LOOSE LEAF CORP.FIN W/CONNECT
Ch. 26 - Prob. 1CQCh. 26 - Prob. 2CQCh. 26 - Prob. 3CQCh. 26 - Cost of Current Assets Grohl Manufacturing, Inc.,...Ch. 26 - Prob. 5CQCh. 26 - Shortage Costs What are the costs of shortages?...Ch. 26 - Prob. 7CQCh. 26 - Prob. 8CQCh. 26 - Prob. 9CQCh. 26 - Prob. 10CQ
Ch. 26 - Prob. 11CQCh. 26 - Prob. 12CQCh. 26 - Prob. 1QPCh. 26 - Cash Equation Blizzard Corp. has a book value of...Ch. 26 - Changes in the Operating Cycle Indicate the effect...Ch. 26 - Prob. 4QPCh. 26 - Calculating Cash Collections The Litzenberger...Ch. 26 - Prob. 6QPCh. 26 - Prob. 7QPCh. 26 - Calculating Payments The Thakor Corporations...Ch. 26 - Calculating Cash Collections The following is the...Ch. 26 - Prob. 10QPCh. 26 - Prob. 11QPCh. 26 - Prob. 12QPCh. 26 - Prob. 13QPCh. 26 - Prob. 14QPCh. 26 - Prob. 15QPCh. 26 - Prob. 1MCCh. 26 - Rework the cash budget and short-term financial...Ch. 26 - Rework the sales budget assuming an 11 percent...
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