Comparative Calendar-Year Financial Data for a Company Are Shown Below

question 159

Essay

Comparative calendar-year financial data for a company are shown below. Calculate the following ratios for the company for 2018:
(a) accounts receivable turnover
(b) day's sales uncollected
(c) inventory turnover
(d) days' sales in inventory
$$\begin{array} { l | l | l } & 2018 & 2017 \\\hline \text { Sales } & \$ 720,000 & \$ 607,500 \\\hline \text { Cost af goods sold } & 450,000 & 382,700 \\\hline \text { Operating expenses } & 168,500 & 134,900 \\\hline \text { Net income } & 51,200 & 51,700 \\\hline & & \\\hline & \text { December 31. } & \text { December 31. } \\\hline & 2018 & 2017 \\\hline \text { Accounts receivable (net) } & \$ 157,500 & \$ 162,500 \\\hline \text { Inventory } & 139,500 & 110,500 \\\hline \text { Total assets } & 1,012,500 & 944,800 \\\hline\end{array}$$

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Definitions:

Market Value

The present cost at which a service or asset is available for purchase or sale in the market.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash, increasing the total number of shares owned by shareholders.

Comprehensive Income

A measure of all changes in equity of a company that result from recognized transactions and other economic events of the period other than those resulting from investments by and distributions to owners.

Net Income

The total earnings of a company, subtracting all expenses from revenues, including taxes and costs, over a specific period.