3-11 What is the inventory turnover ratio as compared to the industry average? Iny turnover s Sales Inventories $7036 $1,716 =4.10X 2002E20012000Ind InV T. 4.1x 4.5x 4.8x 6.1x Copy right C 2002 Harcourt, Inc All rights reserved
3 - 11 Copyright © 2002 Harcourt, Inc. All rights reserved. What is the inventory turnover ratio as compared to the industry average? Inv. turnover = = = 4.10x. Sales Inventories $7,036 $1,716 2002E 2001 2000 Ind. Inv. T. 4.1x 4.5x 4.8x 6.1x
3-12 Comments on Inventory Turnover Inventory turnover is below industry average Firm might have old inventory or its control might be poor. No improvement is currently forecasted Copy right C 2002 Harcourt, Inc All rights reserved
3 - 12 Copyright © 2002 Harcourt, Inc. All rights reserved. ◼Inventory turnover is below industry average. ◼Firm might have old inventory, or its control might be poor. ◼No improvement is currently forecasted. Comments on Inventory Turnover
3-13 DSo is the average number of days after making a sale before receiving cash DSo〓 Receivables Average sales per day eceivables =$7036/360 878 Sales/ 360 =44.9days. Copy right C 2002 Harcourt, Inc All rights reserved
3 - 13 Copyright © 2002 Harcourt, Inc. All rights reserved. Receivables Average sales per day DSO is the average number of days after making a sale before receiving cash. DSO = = = = 44.9 days. Receivables Sales/360 $878 $7,036/360
3-14 Appraisal of Dso 2002E20012000lnd DSO44.939036.8320 Firm collects too slowly, and situation is getting worse. Poor credit policy. Copy right C 2002 Harcourt, Inc All rights reserved
3 - 14 Copyright © 2002 Harcourt, Inc. All rights reserved. Appraisal of DSO Firm collects too slowly, and situation is getting worse. Poor credit policy. 2002E 2001 2000 Ind. DSO 44.9 39.0 36.8 32.0
3-15 Fixed Assets and Total Assets Turnover ratios Fixed assets Sales turnover Net fixed assets $7036 817=8.61x Total assets Sales turnover Total assets $7,036 $3497 2.01X。 Copy right C 2002 Harcourt, Inc All rights reserved
3 - 15 Copyright © 2002 Harcourt, Inc. All rights reserved. Fixed Assets and Total Assets Turnover Ratios Fixed assets turnover Sales Net fixed assets = = = 8.61x. $7,036 $817 Total assets turnover Sales Total assets = = = 2.01x. $7,036 $3,497 (More…)