Use the Following Information That Was Obtained from the 2018

question 105

Essay

Use the following information that was obtained from the 2018 and 2017 financial statements of Pacific Company,River Corporation,and Ocean Company to answer the questions that follow.
Required
$\begin{array}{lrrrr}\text { (in millions) } && \underline{\text { Pacific }} & \underline{\text { River }}& \underline{\text { Ocean }}\\\text { Accounts receivable } & \text { December } 31,2018 & \$ 33,000 & \$ 22,000 & \$ 41,500 \\& \text { December } 31,2017 & 30,000 & 12,800 & 42,600 \\\text { Inventory } & \text { December } 31,2018 & 22,600 & 12,600 & 54,200\\& \text { December 31,2017 } & 23,900 & 32,800 & 44,000 \\\text { Net sales (Credit) } & 2018 & 620,000 & 320,000 & 510,000\\& 2017 & 610,000 & 310,000 & 760,000 \\\text { Cost of goods sold } & 2018 & 211,000 & 406,000 & 311,000 \\& 2017 & 156,000 & 200,000 & 310,000\end{array}$ Compare the three companies and answer the following:
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$$\text { A) Compute the accounts receivable turnover ratio for each company for } 2018 \text {. }$$ B) Which company appears to have the best liquidity position based solely on the accounts receivable tumover? Explain.

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Definitions:

Task Forces

Temporary groups formed to achieve a specific goal or to solve a particular problem within an organization.

Shared Mental Models

A cognitive framework shared among members of a team or organization that helps in understanding, interpreting, and predicting the actions of others within that group.

Cross-functional Teams

Cross-functional teams are groups composed of members from different departments or areas of expertise, working together towards a common goal.

Divergent Backgrounds

The presence of varied cultural, educational, or professional histories among individuals within a group.