Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory...
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Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets For Year Ended December 31 Sales Cost of goods sold Other operating expenses Current Year Interest expense Income tax expense Total costs and expenses Net income Earnings per share $ 35,625 $ 31,800 89,500 112,500 62,500 82,500 10,700 9,375 278,500 255,000 $ 523,000 $ 445,000. Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity The company's income statements for the current year and one year ago follow. Assume that all sales are on credit: $ 129,900 98,500 163,500 131, 100 1 Year Ago $ 75,250 101,500 163,500 104,750 $ 523,000 $ 445,000 Current Year $ 411,225 209,550 12, 100 9,525 $ 673,500 A 2 Years Ago 642,400 $ 31,100 $ 1.90 $ 37,800 50,200 54,000 5,000 230,500 $ 377,500 $ 51,250 83,500 163,500 79,250 $ 377,500 1 Year Ago $ 345,500 134,980 13,300 8,845 $ 532,000 502,625 $ 29,375 $ 1.80 Required (2-a) Compute accounts receivable turnover. (2-b) For each ratio, determine if it improved or worsened in the current year. (3-a) Compute inventory turnover. (3-b) For each ratio, determine if it improved or worsened in the current year. (4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if it improved or worsened in the current year. Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets For Year Ended December 31 Sales Cost of goods sold Other operating expenses Current Year Interest expense Income tax expense Total costs and expenses Net income Earnings per share $ 35,625 $ 31,800 89,500 112,500 62,500 82,500 10,700 9,375 278,500 255,000 $ 523,000 $ 445,000. Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity The company's income statements for the current year and one year ago follow. Assume that all sales are on credit: $ 129,900 98,500 163,500 131, 100 1 Year Ago $ 75,250 101,500 163,500 104,750 $ 523,000 $ 445,000 Current Year $ 411,225 209,550 12, 100 9,525 $ 673,500 A 2 Years Ago 642,400 $ 31,100 $ 1.90 $ 37,800 50,200 54,000 5,000 230,500 $ 377,500 $ 51,250 83,500 163,500 79,250 $ 377,500 1 Year Ago $ 345,500 134,980 13,300 8,845 $ 532,000 502,625 $ 29,375 $ 1.80 Required (2-a) Compute accounts receivable turnover. (2-b) For each ratio, determine if it improved or worsened in the current year. (3-a) Compute inventory turnover. (3-b) For each ratio, determine if it improved or worsened in the current year. (4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if it improved or worsened in the current year.
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2 Compute the accounts receivable turnover ratio Current Year Net Credit Sales Sales Cash Sales 673500 31100 642400 Average Accounts Receivable Accoun... View the full answer
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