An Analyst Is Comparing Financial Results at Two Canadian Companies

question 15

Multiple Choice

An analyst is comparing financial results at two Canadian companies that only have domestic sales. The Metro Canoe Company manufactures and sells canoes. The Country Ski Company manufactures and sells snow skis. Both companies have about the same gross margins, level of sales, credit policies, and have chosen December 31 as their fiscal year end. Which of the following statements is likely to be correct?

• A) The average inventory turnover period will be lower for Metro Canoe.
• B) The average inventory turnover period will be lower for Country Ski.
• C) The average collection period for receivables will be higher for Metro Canoe.
• D) The average collection period for receivables will be lower for Country Ski.
• E) The sales revenue to capital employed will be the same for both companies.

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Definitions:

Older Brothers

Male siblings who are older than their brothers or sisters, often having a significant influence on their younger siblings' development and socialization.

Hypothalamus

A region of the brain below the thalamus that coordinates both the autonomic nervous system and the activity of the pituitary, controlling body temperature, thirst, hunger, and other homeostatic systems, and involved in sleep and emotional activity.

Sexual Orientation

An enduring pattern of emotional, romantic, or sexual attractions to men, women, both sexes, neither sex, or another sex, and the sense of identity based on those attractions.

Older Brothers

Male siblings who are older, often referenced in studies examining birth order and its psychological or social effects.