Jim Short’s Company makes clothing for schools. Sales in 2013 were $4,820,000. Assets were as follows: cash163000accounts receivable889000inventory411000net plant and equipment520000total…
June 4th, 2022
Jim Short’s Company makes clothing for schools. Sales in 2013 were $4,820,000. Assets were as follows:
| cash | 163000 |
| accounts receivable | 889000 |
| inventory | 411000 |
| net plant and equipment | 520000 |
| total assets | 1983000 |
a. compute the following
1. accounts receivable turnover
2. inventory turnover
3. fixed asset turnover
4. total asset turnover
b. in 2014, sales increased to $5,740,000 and the assets for that year were as follows:
| cash | 163000 |
| accounts receivable | 924000 |
| inventory | 1063000 |
| net plant and equipment | 520000 |
| total assets | 2670000 |
Compute the four ratios again.
c. indicate if there is an improvement or decline in total asset turnover, and based on the other ratios, indicate why this development has taken place
Expert Answer
