The following ratios are available for Ming Inc. Instructions a. Is Mings short-term liquidity improving or deteriorating

Question:

The following ratios are available for Ming Inc.

2022 2021 Current ratio Accounts receivable turnover Inventory turnover 1.3:1 12 times 11 times 1.5:1 10 times 9 times

Instructions

a. Is Ming’s short-term liquidity improving or deteriorating in 2022? Be specifi c in your answer, referring to relevant ratios.

b. Do changes in turnover ratios aff ect profi tability? Explain.

c. Identify any steps Ming might have taken, or might wish to take, to improve its management of its accounts receivable and inventory turnovers.

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Related Book For answer-question

Financial Accounting Tools for Business Decision Making

ISBN: 978-1119493631

9th edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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Question Posted: Jul 11, 2019 07:29 AM

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The following ratios are available for Ming Inc. Instructions a. Is Mings short-term liquidity improving or deteriorating

Question:

2022 2021 Current ratio Accounts receivable turnover Inventory turnover 1.3:1 12 times 11 times 1.5:1 10 times 9 times

Step by Step Answer:

a At first glance it appears that Mings liquidity had deteriorated over the past year since the comp...View the full answer

Financial Accounting Tools for Business Decision Making

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