Summary Balance Sheet Data for Greener Gardens Co From This Data We May Conclude That
A)Greener Gardens' Current

question 35

Multiple Choice

Summary balance sheet data for Greener Gardens Co.is shown below (in thousands of dollars) .The company is in a highly seasonal business,and the data show its assets and liabilities at peak and off-peak seasons: $\begin{array}{lrr}\text { Cash } & \text { Peak } & \text { Off-Peak } \\\text { Marketable securities } & \$ 50 & \$ 30 \\\text { Accounts receivable } & 0 & 20 \\\text { Inventories } & 40 & 20 \\\text { Net fixed assets } & 100 & 50 \\\text { Total assets } & \underline{500} & \underline{500}\\ \\\text { Payables and accruals } & \$\$ 30&\$ 10 \\\text { Lhort-term bank debt } & \$ 50&0 \\\text { Cong-term debt } & 300&300 \\\text { Common equity } & 310 & \$ 310 \\\text { Total dams } & \underline{\$690}& \underline{\$690} \end{array}$
From this data we may conclude that

• A)Greener Gardens' current asset financing policy is relatively aggressive; that is, the company finances some of its permanent assets with short-term discretionary debt.
• B)Greener Gardens follows a relatively conservative approach to current asset financing; that is, some of its short-term needs are met by permanent capital.
• C)Without income statement data, we cannot determine the aggressiveness or conservatism of the company's current asset financing policy.
• D)Without cash flow data, we cannot determine the aggressiveness or conservatism of the company's current asset financing policy.
• E)Greener Gardens' current asset financing policy calls for exactly matching asset and liability maturities.

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Definitions:

Factory Supervisor

An individual responsible for overseeing the day-to-day operations within a manufacturing facility, ensuring production targets and quality standards are met.

Machine Operator

A machine operator is a person who operates equipment and machinery in manufacturing or production settings, monitoring and controlling processes.

Variable Costing

An accounting method that only includes variable costs (costs that vary with production levels) in product costs and treats fixed costs as period costs expensed in the period incurred.

Manufacturing Margin

The difference between the sales revenues generated from manufactured goods and the cost of goods sold, indicating the profitability of production.