Use the financial statements of Allstott, Inc., in cxercises 10-6 and 10-7 to compute the following profitability
Question:
Use the financial statements of Allstott, Inc., in cxercises 10-6 and 10-7 to compute the following profitability measures for 2020. Show each computation.
a. Return on sales
b. Asset turnover
c. Return on assets
d. Leverage (equity multiplier) ratio
e. Return on common shareholders' equity
f. Is Allstott, Inc.'s profitability strong, medium, or weak?
Exercises 10-6
Use the Allstott, Inc., balance sheet data below.
1. Compute Allstott, Inc.'s quick (acid-test) ratio at December 31, 2020 and 2019.
2. Use the comparative information from the table on page 597 for Baker, Inc., Calvin Company, and Dunn Companies Limited. Is Allstott's quick (acid-test) ratio for 2020 and 2019 strong, average, or weak in comparison?
Exercises 10-7
Use the Allstott 2020 income statement that follows and the balance sheet from exercise 10-6 to compute the following:
a. Allstott's rate of inventory turnover and days inventory outstanding for 2020
b. Days' sales in average receivables (days sales outstanding) during 2020 (round dollar amounts to one decimal place)
c. Accounts payable turnover and days' payables outstanding
d. Length of cash conversion cycle in days Do these measures look strong or weak? Give the reason for your answer.
Step by Step Answer:
Financial Accounting
ISBN: 9780135433065
7th Canadian Edition
Authors: Walter Harrison, Wendy Tietz, C. Thomas, Greg Berberich, Catherine Seguin