Use the Following Information to Answer the Following Question(s)

question 125

Multiple Choice

Use the following information to answer the following question(s) .
Key Ratios for ABC,Inc.and Its Industry
ABC,Inc.2013 Ratios Industry Average Ratios in 2013
Current ratio 1.2 1.4
Acid test ratio 0.89 0.94
Average collection period 30 days 25 days
Inventory turnover 18.1 20.3
Fixed assets turnover 4.1 4.8
Total asset turnover 2.78 2.8
Debt ratio 50% 60%
Times-interest-earned 5.5% 4.5%
Net profit margin 1.15% 1.5%
Return on equity 5.21% 7.32%
ABC,Inc.Income Statement (in thousands)
December 31,2014
Sales (all credit) $200,000
Cost of goods sold 140,000
Gross profit on sales 60,000
Operating expenses 56,000
Operating income 4,000
Interest expense 1,000
Earnings before tax 3,000
Income tax 1,050
Net income available to common stockholders $1,950
ABC,Inc.Balance Sheet (in thousands)
December 31,2014
Assets
Cash $2,000
Accounts receivable 17,800
Inventories 8,700
Total current assets 28,500
Gross fixed assets 70,000
Accumulated depreciation 26,500
Net fixed assets 43,500
Total assets $72,000
Liabilities and Equity
Accounts payable $18,000
Accruals 13,350
Total current liabilities 31,350
Long-term debt 8,250
Total liabilities 39,600
Common stock (par value and paid in capital) 2,000
Retained earnings 30,400
Total stockholders' equity 32,400
Total liabilities and equity $72,000
-Since 2013,ABC's inventory management has

• A)improved.
• B)deteriorated.
• C)remained the same.
• D)changed but in an indeterminate manner.

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Definitions:

Incentives

Rewards or motives that drive individuals towards specific behavior or accomplishment.

Mowrer's Theory

refers to the two-factor theory of learning developed by O. Hobart Mowrer, combining classical and operant conditioning to explain behavior and its changes.

Tolman's Theory

A theory proposed by Edward C. Tolman that emphasizes cognitive processes in learning, suggesting that individuals form cognitive maps to navigate and understand the environment.

Information

Data that is processed, organized, or structured in a given context to make it meaningful, useful, or actionable.