Question: Rhondda McNabb always asks her advisor in-depth questions before acquiring a companys shares. Rhondda is currently considering investing in Simpson Corp. Simpsons annual report contains
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Rhondda would like answers to the following questions about the trend of events over the three-year period covered in the annual report. Rhonddas questions are:
1. Is it becoming easier for Simpson to pay its current debts on time and to take advantage of cash discounts?
2. Is Simpson collecting its accounts receivable more rapidly?
3. Is Simpsons investment in accounts receivable decreasing?
4. Are dollar amounts invested in inventory increasing?
5. Is Simpsons investment in PPE assets increasing?
6. Is the shareholders investment becoming more profitable?
7. Is Simpson using its assets efficiently?
8. Did the dollar amount of selling expenses decrease during the three-yearperiod?
2013 11 7.00% 13.7% 1.1 to 1 2.4 to 1 8.7 times 7.4 times 11.50% 3.5% 3.0 times 9.4% 3.5 to 1 2012 100.00% 15.3% 1.2 to 1 2.1 to 1 9.9 times 8.2 times 12.25% 2014 128.0090 9.8% Net sales trend 9.75% Return on equity Profit margin 3.3% 3.1 times 10.1% 3.3 to 1 8.8% Return on total assets
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