The following selected financial data pertain to four unidentified companies: This financial information pertains to the following
Question:
This financial information pertains to the following companies:
a. Retail fur store
b. Advertising agency
c. Wholesale candy company
d. Car manufacturer
Required:
Match each company with its financialinformation.
COMPANIES 2 Balance Sheet Data (component percentage) Cash 3.5 4.7 8.2 11.7 Accounts receivable 16.9 28.9 16.8 51.9 46.8 4.8 18.7 Inventory Property and equipment Income Statement Data 35.6 57.3 21.7 18.3 7.6 (component percentage) Gross profit 44.8 22.0 22.5 N/A* 3.2 Profit before taxes 2.1 0.7 1.2 Selected Ratios Current ratio 1.3 1.5 1.6 1.2 Inventory turnover ratio Debt-to-equity ratio 3.6 9.8 1.5 N/A* 2.6 2.6 3.2 3.2 *N/A = Not applicable.
Step by Step Answer:
1 Car manufacturer high inventory high property e...View the full answer
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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