The Jiffy Corporation Data for the Current Year - What Would a Horizontal Analysis Report with Respect to

question 137

Multiple Choice

The Jiffy Corporation data for the current year: $\begin{array}{|l|c|c|}\hline \text { Account } & \text { Current year } & \text { Prior year }\\\hline \text { Current assets } & \$ 72,000 & \$ 60,000 \\\hline \text { A/R } & \$ 49,500 & \$ 45,000 \\\hline \text { Mdse. Inventory } & \$ 56,000 & \$ 40,000 \\\hline \text { Current liabilities } & \$ 63,250 & \$ 55,000 \\\hline \text { Long-term liabilities } & \$ 31,500 & \$ 30,000 \\\hline \text { Common stock (5,000 shares) } & \$ 54,000 & \$ 40,000 \\\hline \text { Retained earnings } & \$ 28,750 & \$ 20,000 \\\hline \text { Net sales revenue } & \$ 565,600 & \$ 505,000 \\\hline \text { COGS } & \$ 454,250 & \$ 395,000 \\\hline \text { Gross Profit } & \$111,350 & \$ 110,000 \\\hline \text { Selling/General expenses } & \$46,800 & \$ 52,000 \\\hline \text { Net income before taxes } & \$ 64,550 & \$ 58,000 \\\hline \text { Income tax expense } & \$ 19,250 & \$ 17,500 \\\hline \text { Net Income } & \$ 45,300&\$40,000\\\hline\end{array}$


- What would a horizontal analysis report with respect to current assets?

• A)Inventory turnover of 8.11 times
• B)A 20% increase in current assets
• C)Current ratio of 1.14
• D)Current assets as 40.56% of total assets

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Definitions:

Monopolist

An entity that is the sole provider of a particular good or service, thereby controlling the entire market for that good or service.

Industry

Industry refers to the production of goods or services within an economy, characterized by various sectors such as manufacturing, technology, and services.

Maximum Profit

The highest possible financial gain a business can achieve in a given period, calculated by maximizing the difference between total revenues and total costs.

Per Month

A time frame or billing period referring to the activities or costs accrued within a single month.