Music Masters Sells a Unique Assortment of Sheet Music Including

question 138

Multiple Choice

Music Masters sells a unique assortment of sheet music including just about any published music ever written before 1970. Its customers are high school and college band directors and choir directors who require several copies of the same music, including music written for a variety of instruments. To buy inventory for resale, the business seeks out wholesalers with large inventories. Due to the fact that cash flow is always an important concern, the owner keeps a watchful eye on how quickly various genres of sheet music sell. To help him in this assessment, which of the following ratios would be an important part of this company's financial analysis?

• A) asset turnover ratio
• B) inventory turnover ratio
• C) sales turnover ratio
• D) cost of goods sold turnover ratio

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Definitions:

Valuable Asset

An item, thing, or entity that is of great worth or importance in achieving goals or in the financial standing of an organization or individual.

Small Business

Refers to privately owned corporations, partnerships, or sole proprietorships with fewer employees and less annual revenue than a regular-sized business.

Business Failure

The cessation of operations and the inability of a company to continue financial performance due to various factors such as poor management or market conditions.

Receivership

A legal process in which a court appoints a receiver to manage the assets and business operations of a company that is in financial distress.