Net Devices Inc $\text { ASEETS (\$in thousands) }$ $\text { LIABLIIES ( \$ in thousands) }$

question 14

Multiple Choice

Net Devices Inc. The following balance sheets and income statements are for Net Devices Inc., a manufacturer of small electronic devices, including calculators, personal digital assistants and mp3 players. For purposes of these questions assume that the company has an effective tax rate of 35%.
BALANCE SHEETS
$\text { ASEETS (\$in thousands) }$


$\begin{array}{c}\begin{array}{lll}\text { Fiscal year end}\\ \text { Cash}\\ \text { Marketable securities}\\ \text { Receivables}\\ \text { Inventories}\\ \text { Other current assets}\\ \text { Total current assets}\\\\ \text { Property, plant \& equipment}\\\\ \text { Intangibles}\\ \text { Deposits \& other assets}\\ \text { Total assets} \end{array}\begin{array}{l}2011 \\\$ 875,650 \\6,560 \\771,580 \\1,320,150 \\\underline{249,000}\\{3,222,940} \\\\1,118,750 \\\\263,050 \\\underline{184,500}\\\underline{\$ 4,789,240} \end{array}\begin{array}{l}2010 \\\$ 571,250 \\0 \\775,250 \\1,254,600 \\\underline{231,200}\\2,832,300 \\\\1,100,300 \\\\241,000 \\\underline{168,250}\\\underline{ \$ 4,341,850} \end{array}\begin{array}{l}2009 \\\$ 154,230 \\0 \\902,000 \\1,418,500 \\\underline{229,900}\\{2,704,630} \\\\1,122,400 \\\\215,600 \\\underline{168,900}\\\underline{\$ 4211530} \end{array}\end{array}$
$\text { LIABLIIES ( \$ in thousands) }$

$\begin{array}{c}\begin{array}{lll}\text {Fiscal year end}\\\text {Accounts payable}\\\text {Current long term debt}\\\text {Acculed expenses}\\\text {Income taxespayable}\\\text {Other curent liabilities}\\\text {Total current liabilities}\\\\\text {Long term debt}\\\text {Other long term liabilities}\\\text {Total liabilities}\\\\\text {Preferred stock}\\\text {Common stock net}\\\text {Adchtional Paid-in Capital}\\\text {Retained earnings}\\\text {Treasuy stock}\\\text {Shareholders' equity}\\\\\text {Total Liab \& Equity} \end{array}\begin{array}{l}2011 \\\$ 1,178,540 \\18,100 \\664,100 \\138,900 \\\underline{\quad0}\\{1,999,640} \\\\478,250 \\\underline{13,350}\\{2,491,240} \\\\850,000 \\ 4,000 \\869,000 \\1,430,500 \\\underline{(855,500) }\\\underline{2,298,000} \\\\\underline{\$ 4789240} \\ \end{array}\begin{array}{l}2010 \\\$ 1,061,100 \\316,500 \\615,900 \\108,400 \\\underline{\quad0}\\{2,101,900} \\\\378,400 \\\underline{\quad0}\\{2,480,300} \\\\850,000 \\3,950 \\758,000 \\1,055,000 \\\underline{(805,400) }\\\underline{1,861,550} \\\\ \underline{\$ 4,341,850} \end{array}\begin{array}{l}2009 \\\$ 1,138,250 \\150,900 \\585,400 \\38,200 \\\underline{\quad0}\\1,912,750 \\\\599,630 \\\underline{\quad0}\\ 2,512,380 \\\\550,000 \\3,800 \\689,500 \\1,245,050 \\\underline{(789,200) } \\\underline{ 1,699,150}\\\\\underline{\$4,211,530} \end{array}\end{array}$
$\text { INCOME S'TATEMENTS (\$ in thousands) }$

$\begin{array}{c}\begin{array}{lll}\text {Fiscal year end}\\\text {Net sales}\\\text {Cost of Goods Sold}\\\text {Grosspiofit}\\\\\text {Selling, general \& admin. Exp.}\\\text { Income before deprec. \& amort.}\\\\\text {Depreciation \& amortization }\\\text {Interest expense}\\\\\text {Income before tax}\\\text {Provision for income taxes}\\\text {Minority interest}\\\\\text {Net income}\\\\\text {Outstanding shares(in thousands) }\\\text {Preferred Dividends (in thousands) }\end{array}\begin{array}{l}2011 \\\$ 11,455,500\\\underline{(8,026,450) }\\{3,429,050} \\\\\underline{(1,836,400) }\\{1,592,650} \\\\\text { (785,250) } \\\underline{(46,195) }\\\\761,205 \\(157,725) \\\underline{\quad\quad--}\\\\\underline{\$603,480 }\\\\308,515 \\\$85,000 \end{array}\begin{array}{l}2010 \\\$ 11,082,100 \\\underline{(7,940,065}\\{3,142,035} \\\\\underline{(1,789,200) }\\{1,352,835} \\\\(757,250) \\\underline{(43,340} \\\\552,245 \\(112,290) \\\underline{\quad\quad--}\\\\\underline{\$439,955}\\\\303,095\\\$85,000 \end{array}\end{array}$
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Refer to the information for Net Devices Inc. What is the inventory turnover for Net Devices for 2011?

• A) 10.32
• B) 8.90
• C) 2.51
• D) 6.23

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Definitions:

Purely Competitive

A market structure characterized by many buyers and sellers, where each has negligible impact on market price.

Minimum ATC

The lowest point on the Average Total Cost curve, indicating the most cost-efficient level of production.

Productively Efficient

Refers to a situation where goods and services are produced at the lowest possible cost, and resources are utilized in the most efficient manner.

Pure Competition

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information, allowing no single firm to influence the market price.