BTN 13-7 Assume that David and Tom Gardner of The Motley Fool (Fool.come) have i
ID: 2553857 • Letter: B
Question
BTN 13-7 Assume that David and Tom Gardner of The Motley Fool (Fool.come) have impressed you since you first Chat and decide to apply for it. Your resume is successfully screened from the thousands received and you advanoe interview process. You learn that the interview consists of questions below. (The data are taken from a small merchandiser in outdoor recreational rise to prominence ence in financial clrcles. You learn of a staff opening at The Motley Fool My Media financial the following financial facts and answering analysis Materials Course Seling expansos to sales... Sa to plant aets atlo 1000% 15.3% 17% Acd-test rado 0.8 to I 1.2 to 1 Accounts rocevablo turnove Total aset turnover 8% 975% Racurn on equity 11.50% 1225% Page 553 Required Use these data to answer each of the following questions with explanations. 1. Is it becoming easier for the company to meet its current liabilities on time and to take advantage of any available cash discounts? Explain. 2. Is the company collecting its accounts receivable more rapidly? Explain. 3. Is the company's investment in accounts receivable decreasing? Explain. 4. Is the company's investment in plant assets increasing? Explain. 5. Is the owner's investment becoming more profitable? Explain. 6. Did the dollar amount of selling expenses decrease during the three-year period? Explain.Explanation / Answer
6.
Yes. The dollar amount of selling expenses has decreased during the three-year period.
This can be said by looking at the ratio of selling expenses to sales. We can see that the ratio has come down from 15.3% to 9.8% , even though there is an increasing trend in sales, which has grown year on year by 25% and 37% respectively during the three year period.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.