Solution-Explain the inventory turnover ratio

Explain the inventory turnover ratio

Assignment Help Finance Basics

Reference no: EM133116467

The following financial statements relate to the ABC Company:

Assets	£	Liabilities & Net worth	£
Cash	28,500	Trade creditors	116,250
Debtors	270,000	Notes payable (9%)	54,000
stock	649,500	Other current liabilities	100,500
Total current assets	948,800	Long term debt (10%)	300,000
Net fixed assets	285,750	Long term bonds	663,000
	1,233,750		1,233,750

Income statement for the year ended 31^st March 2020

	£
Sales	1,972,500
Less cost of sales	1,368,000
Gross profit	604,500
Selling & administration expenses	498,750
Earnings before interest & tax	105,750
Interest expense	34,500
	71,250
Estimated taxation (40%)	28,500
Earnings after interest and tax	42,750

Required

Calculate:

Inventory turnover ratio
Quick /acid test ratio
Total assets turnover
Net profit margin
Debtors collection period

Reference no: EM133116467

Questions Cloud

Calculate the break-even point : Rosy Bhd. Plans to manufacture and sell 300,000 units next year. Fixed costs per year total RM450,000 and variable costs are estimated to be 40% of sales.

About GLBA and FACTA and the Red Flag Rule : You learned about GLBA and FACTA and the Red Flag Rule to help protect consumer financial information.

How much do they need to deposit in a bank account today : Marlene and Jeff have target of $100,000 in 20 years for their daughter Ariana's college education fund. How much do they need to deposit in bank account today

Current market price of the share : The company has just paid a dividend of £ 5 per share and the expected growth rate 10% forever. The current market price of the share is £ 20. The preferred sto

Explain the inventory turnover ratio : The following financial statements relate to the ABC Company:

What were the total collections on account : The Accounts Receivable account has a beginning balance of $38500 and an ending balance of $54800. What were the total collections on account

What is the first political event you can remember : What is the first political event you can remember and How did the adults in your household react? How did this impact you?

Biggest security concerns or concepts of cloud operations : Which you analyze three of the biggest security concerns, measures, or concepts of cloud operations.

Why does a company go for share buyback : Why does a company go for share buyback? How does the 100% share buyback impact the Board of Directors?

User Account

All Pages

Explain the inventory turnover ratio

Reference no: EM133116467

Reference no: EM133116467

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT