The 2011 income statement of Anderson Medical Supply Company reported net sales of $8 million, cost of goods sold of $4.8 million, and net income of $800,000. The following table shows the company's comparative balance sheets for 2011 and 2010:

Some industry averages for Anderson's line of business are
Inventory turnover ...... 5 times
Average collection period ... 25 days
Asset turnover ...... 1.8 times

Required:
Assess Anderson's asset management relative to itsindustry.

Transcribed Image Text:

(S in 000s) 2011 2010 Assets Cash Accounts receivable Inventory Property, plant, and equipment (net 2,400 2.120 Total assets Liabilities and Shareholders' Equity Current liabilities Bonds payable Paid-in capital Retained earnings Total liabilities and shareholders equitys 4,300S 3,700 S 300 S380 700500 900 700 S4,300 S3,700 960 S 830 1,200 1,200 1000 1,000 1.01 670