The following information was obtained from the 2016 and 2015 financial statements Better Books and Tenacious Texts. Assume all sales are on credit for both companies.
REQUIRED:
1. Using the information provided, compute the following for each company for 2016rounded to two decimals:
a. Accounts receivable turnover ratio
b. Number of days' sales in receivables
c. Inventory turnover ratio
d. Number of days' sales in inventory
e. Cash-to-cash operating cycle
2. Comment briefly on the liquidity of each of these two companies.
Definitions:
Direct Access Storage Device (DASD)
A type of storage device that allows data to be read and written directly in a random access manner, without having to sequentially access other data first.
Medium
A substance or material that something is transmitted through, especially in the context of communications or media.
Floppy Disk
A type of disk storage composed of a disk of thin and flexible magnetic storage medium enclosed in a square or rectangular plastic shell, now largely obsolete.
Platter
A rigid, flat surface in a hard disk drive where data is magnetically stored.
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