Using the Ratios and Information Given Below for SportsOutlet

question 17

Essay

Using the ratios and information given below for SportsOutlet.com, analyze the short-term liquidity and operating efficiency of the firm. $\begin{array}{lll}&2015&2014\\\text { Current ratio } & 1.50 & 1.35 \\\text { Quick ratio } & 1.15 & 1.08 \\\text { Cash flow liquidity ratio } & 1.39 & 1.32\\\text { Average collection period } & 10 \text { days } & 7 \text { days } \\\text { Days inventory held } & 35 \text { days } & 28 \text { days } \\\text { Days payable outstanding } & 86 \text { days } & 79 \text { days }\\\text { Cash conversion cycle } & (41 \text { days) } & \text { (44 days) } \\\text { Fixed asset turnover } & 27.36 \text { times } & 22.14 \text { times } \\\text { Total asset tumover } & 1.93 \text { times } & 2.21 \text { times }\\\text { Cash flow from operations (in millions) } & \$ 523 & \$ 376 \\\text { Net sales (in millions) } & \$ 6,743 & \$ 5,187\end{array}$

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Definitions:

Moral Development

The process through which an individual learns to distinguish right from wrong, and to develop values and ethics.

Social Order

The set of linked social structures, practices, and norms that maintain and enforce certain patterns of relating and behaving within a society.

Conventional

Pertains to methods, behaviors, or ideas that are traditional or widely accepted within a society.

Babble

The production of speech-like but meaningless sounds, especially in infants as a precursor to language development.