721 Chapter 14 Fnancial Satement Analysis Stargel Inc For the Years Ended Decemb

Question

721 Chapter 14 Fnancial Satement Analysis Stargel Inc For the Years Ended December 31, 202 and 20 Cost of goods sold. s 2,000 Administrative expenses Total operating expenses Income from operations 1,150,000 $1,160.000 150 000140.000 1,300,000 $1.300,000 Other expense Iinterest.. Income befone income tax income tax expense 170,000 1,130,000 $1,150,000 Stargell Ine Cemparative Balance Sheet December 31, 20Y2 and 20Y1 Cash. Marketable securities-. .. ,,-.. Accounts recelvable (net).... . Total current assets. Long-term investments Property, plant, and equipment (net) Mortgage note payable, 10% . Bonds payable, 10% Total long-term iablities $1.700.000 1,500,000 Preferred $0.90 stock, $10 par Common stock, $5 par 500.000 $ 500,000 $7180.000 6375.000 Total liabilities and stockholders' equity Determine the following measures for 20Y2 (round to one decimal place including percentages, except for per-share amounts) 4. Accounts receivable turmover 5. Number of days' sales in receivables

Explanation / Answer

4 Accounts receivable turnover = net credit sales /Average accounts receivable Net sales 10000000 9400000 Beginning accounts receivable 510000 330000 Ending accounts receivable 740000 380000 Average accounts receivable 625000 355000 Accounts receivable turnover 16.0 26.5 5 Days sales outstanding = 365 / accounts receivable tunover Days sales outstanding 22.8 13.8 Days 6 Inventory turnover = Cost of goods sold / Average inventory Cost of goods sold 5350000 3530000 Beginning inventory 950000 580000 Ending inventory 1190000 675000 Average inventory 1070000 627500 Average inventory = (Beginning + Ending )/2 Inventory turnover 5.0 5.6 7 Days sale in inventory = 365 / inventory turnover Days sales in inventory 73.0 64.9 Days 8 Fixed asset to long term liabilities = Fixed assets / Long term liabilities Fixed assets 3740000 Long term liabilities 1700000 Fixed assets to long term liabilities 2.2

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