As Baldwin Company controller, you are responsible for informing the board of di
ID: 2370629 • Letter: A
Question
As Baldwin Company controller, you are responsible for informing the board of directors about its financial activities. At the board meeting, you present the following information:
2011 2010 2009 Sales trend percent 147.0% 135.0% 100.0%
Selling expenses to sales 10.1% 14.0% 15.6%
Sales to plant assets ratio 3.8 to 1 3.6 to 1 3.3 to 1
Current ratio 2.9 to 1 2.7 to 1 2.4 to 1
Acid-test ratio 1.1 to 1 1.4 to 1 1.5 to 1
Inventory turnover 7.8 times 9.0 times 10.2 times
Accounts receivable turnover 7.0 times 7.7 times 8.5 times
Total assets turnover 2.9 times 2.9 times 3.3 times
Return on total assets 10.4% 11.0% 13.2%
Return on stockholder
Explanation / Answer
2011 2010 2009
Sales trend percent 147.0% 135.0% 100.0%
Selling expenses to sales 10.1% 14.0% 15.6%
Sales to plant assets ratio 3.8 to 1 3.6 to 1 3.3 to 1
Current ratio 2.9 to 1 2.7 to 1 2.4 to 1
Acid-test ratio 1.1 to 1 1.4 to 1 1.5 to 1
Inventory turnover 7.8 times 9.0 times 10.2 times
Accounts receivable turnover 7.0 times 7.7 times 8.5 times
Total assets turnover 2.9 times 2.9 times 3.3 times
Return on total assets 10.4% 11.0% 13.2%
Return on stockholder
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