Selected data from Quach Company follow. Required Compute the following and round computations to two decimal points.
Question:
Required
Compute the following and round computations to two decimal points.
a. The accounts receivable turnover for 2015.
b. The inventory turnover for 2015.
c. The net margin for2014.
Balance Sheet Data As of December 31 2015 2014 Accounts receivable Allowance for doubtful accounts Net accounts receivable Inventories, lower of cost or market $720,000 640,000 (60,000) 40,000) $660,000 $600,000 $450,000 $500,000 Income Statement Data Year Ended December 31 2015 2014 $5,000,000 $3,600,000 800,000 Net credit sales Net cash sales Net sales Cost of goods sold Selling, general, and administrative expenses Other expenses Total operating expenses 1,000,000 $6,000,000 $4 400,000 3,500,000 $2,600,000 320,000 300,000 24100 $4,400,000 $3,160,000 600,000
Step by Step Answer:
a Net credit sales Average accounts rece...View the full answer
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Old
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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