Tumwater Canyon Campsites began operations on January 1, 2015. The following information is available at year-end. Assume
Question:
Tumwater Canyon Campsites began operations on January 1, 2015. The following information is available at year-end. Assume that all sales were on credit.
REQUIRED:
Prepare an income statement and the current asset and current liability portions of the balance sheet for 2015. Current assets consist of cash, accounts receivable, and inventory. Accounts payable is Tumwater’s only current liability.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
25,000 Net income Receivables turnover Inventory turnover Accounts payable Return on sales Gross margin Quick ratio 8% 40% 50% $200,000
Step by Step Answer:
Return on Sales Net Income Net Sales 08 25000 Net Sales Net Sales 312500 Cost of Goods Sold Net sale...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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