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Question
Presented below are selected data from the financial statements of Harper Company for the last three years.
Year 3 Year 2 Year 1
Total assets $1,205,000 $952,000 $945,000
Cost of goods sold 360,000 420,000 440,000
Inventory 56,000 64,000 53,000
Net income 65,000 25,000 16,000
A. Calculate Harper's inventory turnover ratio for years 2 and 3.
B. Calculate the number of days in inventory at December 31, year 3 and year 2. Assume 365 days in a year.
C. Explain the implications of your calculations with respect to inventory management.
Answer
This answer is hidden. It contains 552 characters.
Related questions
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________________ are the ongoing, day-to-day, revenue-generating activities of an organization.
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A high accounts receivable turnover ratio indicates
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a. the investment opportunities available to an organization.
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c. the competitiveness of an organization.
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Dividing the market price of a share of stock by the earnings per share gives the price-earnings ratio.
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Q:
u200b
Kooper Co.
Income Statement
For the Year Ended December 31, Year 1
Revenues: u200b u200b
Net sales u200b $383,000
Less: Cost of goods sold u200b 121,700
Gross margin u200b $261,300
Less Operating expenses: u200b u200b
Selling expenses $41,500 u200b
Administrative expenses 56,500 u200b
Interest expense 12,000 u200b
Total expenses u200b 100,000
Net income u200b $151,300
Kooper Co.
Balance Sheet
December 31,Year 1
Assets
Current assets: u200b u200b u200b
Cash u200b $53,000 u200b
Accounts receivable u200b 64,300 u200b
Marketable securities u200b 10,500 u200b
Inventory u200b 93,250 u200b
Total current assets u200b u200b $221,050
Property, plant, and equipment: u200b u200b u200b
Store equipment $325,000 u200b u200b
Less Accumulated depreciation 162,100 $162,900 u200b
Office equipment $149,750 u200b u200b
Less Accumulated depreciation 72,750 77,000 u200b
Total property, plant, and equipment u200b u200b 239,900
Total assets u200b u200b $460,950
Liabilities
Current liabilities: u200b u200b u200b
Accounts payable u200b $97,200 u200b
Salaries payable u200b 28,700 u200b
Total current liabilities u200b u200b $125,900
Long-term liabilities: u200b u200b u200b
Note payable (due Year 1) u200b u200b 154,000
Total liabilities u200b u200b $279,900
Stockholders Equity
Total stockholders equity u200b u200b 181,050
Total liabilities and equity u200b u200b $460,950u200b
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Required: Calculate the following ratios:
A. return on sales
B. return on total assets
C. earnings per share
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Cash $128,000 $201,000
Accounts receivable 472,000 438,000
Inventories 797,000 673,000
Prepaid expenses 81,000 92,000
Plant and equipment (net) 2,655,000 2,428,000
Total assets $4,133,000 $3,832,000
Accounts payable $198,000 $280,600
Long-term bonds payable 1,000,000 1,000,000
Preferred stock, 10%, $100 par 450,000 450,000
Common stock, no par 1,800,000 1,800,000
Retained earnings 685,000 301,400
Total liabilities and stockholders equity $4,133,000 $3,832,000
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Sales, net $5,400,000
Less cost of goods sold 3,240,000
Gross margin 2,160,000
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Net income before taxes 1,070,000
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Year 3 Year 2 Year 1
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Net credit sales 800,000 650,000 720,000
Accounts receivable 85,000 79,000 74,000
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Bogart Company has 40,000 shares of common stock outstanding. The book value per share of this stock was $60 and the market value per share was $75 at the end of the year. Net income for the year was $400,000. Interest on long-term debt was $40,000. Dividends paid to common stockholders were $3 per share. The tax rate was 30%. The company's price-earnings ratio at the end of the year was
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