Simon Company’s year-end balance sheets follow.

At December 31	Current Yr					1 Yr Ago			2 Yrs Ago
Assets
Cash		$	34,016			$	39,762		$	42,272
Accounts receivable, net			89,200				63,000			50,600
Merchandise inventory			1130500				83,500			58,000
Prepaid expenses			10,954				10,437			4,697
Plant assets, net			347,206				315,694			284,631
Total assets		$	594,376			$	512,393		$	440,200
Liabilities and Equity
Accounts payable		$	143,560			$	83,997		$	56,363
Long-term notes payable secured by mortgages on plant assets			108,390				114,315			94,366
Common stock, $10 par value			162,500				162,500			162,500
Retained earnings			179,926				151,581			126,971
Total liabilities and equity		$	594,376			$	512,393		$	440,200

The company’s income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit:

For Year Ended December 31	Current Yr						1 Yr Ago
Sales				$	772,698					$	609,748
Cost of goods sold	$	487,943					$	410,297
Other operating expenses		247,971						159,700
Interest expense		13,598						14,518
Income tax expense		10,399						9,468
Total costs and expenses					759,911						593,983
Net income				$	39,996					$	37,243
Earnings per share				$	2.46					$	2.29

(2-a) Compute accounts receivable turnover.
(2-b) For each ratio, determine if it improved or worsened in the current year.

Simon Company’s year-end balance sheets follow.

At December 31	Current Yr					1 Yr Ago			2 Yrs Ago
Assets
Cash		$	35,940			$	42,011		$	43,761
Accounts receivable, net			89,000				62,600			51,100
Merchandise inventory			110,000				83,500			57,000
Prepaid expenses			11,574				11,028			4,862
Plant assets, net			368,799				331,303			289,777
Total assets		$	615,313			$	530,442		$	446,500
Liabilities and Equity
Accounts payable		$	151,681			$	88,748		$	58,349
Long-term notes payable secured by mortgages on plant assets			114,522				120,782			97,690
Common stock, $10 par value			162,500				162,500			162,500
Retained earnings			186,610				158,412			127,961
Total liabilities and equity		$	615,313			$	530,442		$	446,500

The company’s income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit:

For Year Ended December 31	Current Yr						1 Yr Ago
Sales				$	799,907					$	631,226
Cost of goods sold	$	487,943					$	410,297
Other operating expenses		247,971						159,700
Interest expense		13,598						14,518
Income tax expense		10,399						9,468
Total costs and expenses					759,911						593,983
Net income				$	39,996					$	37,243
Earnings per share				$	2.46					$	2.29

(a) Compute accounts receivable turnover.

(b) For each ratio, determine if it improved or worsened in the current year.

Answer rating: 100% (QA)

2a Accounts receivable turnover credit sales average accounts receivable Accounts receivable turnover 772698 76100 Accounts receivable turnover 102 times Sales for the current year were 772698 and sal... View the full answer