JORDAN COMPANY

Current ratio = current assets/current liabilities

2014:

Current ratio: 195,000/100,000= 2 times

2015:

Current ratio: 240,000/108,000= 1.76 times

Average collection period is 365*accounts receivable/sales

2014:

365*80,000/600,000= 48.67 days

2015:

365*100,000/700,000= 52.14 days

Inventory turnover = cost of goods sold/inventory

2014:

375,000/100,000=-3.75 times

2015:

450,000/125,000=5.6 times

Gross Margin Percentage = Gross Margin/Net sales * 100

2014:

225,000/600,000*100= 37.5%

2015:

250,000/700,000*100= 35.71%

Return on equity = Net income/total stockholders equity

2014:

30,000/200,000= .15

2015:

36,000/218,000= .17

INDUSTRY

Current ratio = current assets/current liabilities

2014:

Current ratio: 195,000/100,000=1.95 times

2015:

Current ratio: 240,000/108,000=2.22 times

Average collection period is 365*accounts receivable/sales

2014:

365*90,000/100,000= 32.85 days

2015:

365*110,000/1,100,000=36.5 days

Inventory turnover = cost of goods sold/inventory

2014:

650,000/80,000=8.13 times

2015:

700,000/100,000= 7 times

Gross Margin Percentage = Gross Margin/Net sales * 100

2014:

350,000/1,000,000*100= 35%

2015:

400,000/1,100,000*100= 36.36%

Return on equity = Net income/total stockholders equity

2014:

48,000/280,000= .17

2015:

66,000/300,000= .22

QUESTION:

Compare the performance of the Jordan Corporation in 2015 to the industry averages and comment on each.