Rags to Riches Selected Data from the Financial Statements Are

question 125

Multiple Choice

Rags to Riches Selected data from the financial statements are provided below:
$\begin{array}{ll}& \underline{ 2015 } & \underline{ 2014 } \\ \text { Accounts Receivable } &\$ 120,000 & \$ 76,000 \\ \text { Inventory } &24,000 & 32,000 \\ \text {Total Assets } &900,000 & 760,000 \\ \text { Net Sales } &760,000 & 540,000 \\ \text { Cost of Goods Sold } &320,000 & 420,000\end{array}$
-Refer to Rags to Riches.Which of the following would be found through ratio analysis of the company's financial statements?

• A)The accounts receivable turnover ratio is 7.76 in 2015.
• B)Cost of goods sold increased $50,000 or 23.8% in 2015.
• C)Accounts receivable increased $22,000 during 2015.
• D)Total assets decreased 18.4% during 2015.

Understand the components of the Du Pont identity and its application in evaluating company performance.

Understand the importance of financial statement information for creditors and its role in performance evaluation.

Interpret key financial ratios, including profit margin, fixed asset turnover, and total asset turnover.

Understand the impact of changes in accounts receivable, inventory, and fixed assets on cash flow and how this is reflected in the statement of cash flows.

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Definitions:

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