Refer to Rhodes Bakery

question 82

Essay

Refer to Rhodes Bakery.Calculate the following asset efficiency ratios for Year 3 and Year 2: accounts receivable turnover ratio,inventory turnover ratio,and asset turnover ratio.Also determine the operating cycle.Round your answers to two decimal places.Comment on the company's asset efficiency ratios.
A portion of the company's income statements are shown below.At December 31,Year 1,accounts receivable,inventories,and total assets were $18,500,$6,500,and $325,000,respectively.
$\begin{array}{r}\text { For the Years Ended }\\\begin{array}{lrr}&\text { Year 3}&\text { Year 2}\\\text { Net sales } & \$ 475,000 & \$ 387,500 \\\text { Cost of goods sold } & 240,000 & 200,000 \\\text { Gross profit } & \$ 235,000 & \$ 187,500\end{array}\end{array}$