The Following Information Is Available for All-4-U Company for the Year

question 34

Essay

The following information is available for All-4-U Company for the year ending December 31,Year 2:
$$\begin{array} { l r l l } \text { Net sales } & \$ 5,000,000 & \text { Accounts receivable -December 31. Year 1 } & \$ 1,250,000 \\\text { Cost af goods sold } & \$ 3,500,000 & \text { Accounts receivable -December 31. Year } 2 & \$ 1,000,000 \\\text { Operating income } & \$ 600,000 & & \\\text { Net income } & \$ 400,000 & &\end{array}$$
A) Compute the gross profit ratio for Year 2.
B) Compute the operating margin ratio for Year 2.
C) Year 2
D) Compute the accounts receivable turnover for Year 2

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Definitions:

Third-Party Firm

An external organization that provides services or products to another company, not directly connected to the primary business.

Outsourcing

The business practice of hiring a party outside a company to perform services or create goods that traditionally were performed in-house.

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