Homework answers / question archive / University Of Arizona ATMO 005 Quiz 17 1)Which of the following is not a profitability ratio? Earnings per share Ratio of net sales to assets Days’ sales in inventory Rate earned on total assets All of the above are profitability ratios     Information for the Glen Company and the Clarke Company appears below               Clarke   Glen                       Year     Year     Year     Year       2              1              2              1         Revenue   12,000   10,000   31,000   27,000       Cost of     Goods Sold       10,200   8,400     26,000   22,000                                       Cash   700         400         300         900                       Accounts     receivable       500         400         300         200                       Inventory   3,300     3,000     1,700     1,500                   2

University Of Arizona ATMO 005 Quiz 17 1)Which of the following is not a profitability ratio? Earnings per share Ratio of net sales to assets Days’ sales in inventory Rate earned on total assets All of the above are profitability ratios     Information for the Glen Company and the Clarke Company appears below               Clarke   Glen                       Year     Year     Year     Year       2              1              2              1         Revenue   12,000   10,000   31,000   27,000       Cost of     Goods Sold       10,200   8,400     26,000   22,000                                       Cash   700         400         300         900                       Accounts     receivable       500         400         300         200                       Inventory   3,300     3,000     1,700     1,500                   2

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University Of Arizona

ATMO 005

Quiz 17

1)Which of the following is not a profitability ratio?

Earnings per share

Ratio of net sales to assets

Days’ sales in inventory

Rate earned on total assets

All of the above are profitability ratios

 

 

Information for the Glen Company and the Clarke Company appears below

 

 

 

 

 

 

 

Clarke   Glen

 

 

 

 

 

 

 

 

 

 

 

Year

 

 

Year

 

 

Year

 

 

Year

 

 

 

2              1              2              1

 

 

 

 

Revenue

 

12,000   10,000   31,000   27,000

 

 

 

Cost of

 

 

Goods Sold

 

 

 

10,200   8,400     26,000   22,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

700         400         300         900

 

 

 

 

 

 

 

 

 

 

 

Accounts

 

 

receivable

 

 

 

500         400         300         200

 

 

 

 

 

 

 

 

 

 

 

Inventory

 

3,300     3,000     1,700     1,500

 

 

 

 

 

 

 

 

 

2. Based on a ratio analysis, which company better manages its inventory?

Glen (based on days sales in Inventory of 22.5 versus 112.7)

Clarke

Neither is good Both are the same

 

 

Information for the Bailey Company appears below

 

 

 

 

 

 

 

Year       Year

 

 

2              1

 

 

 

 

Cash

 

4,200     2,900

 

 

 

 

 

 

 

 

 

 

 

Accounts

 

 

receivable

 

 

 

16,800   12,000

 

 

 

 

 

 

 

 

 

 

 

 

Inventory

 

29,000   20,000

 

 

 

 

 

 

 

 

 

 

Equipment

 

46,500   33,000

 

 

 

 

 

Accounts

 

 

payable

 

 

 

8,900     7,000

 

 

 

 

 

 

Notes

 

 

payable

 

 

 

10,000   6,100

 

 

 

 

 

Equity

 

77,600   54,800

 

3. What is the company’s liabilities to stockholder’s equity ratio for year 2? Round your answer to two decimal places.

 

 

4. For your virtual business in Marketplace (for the class team), what is your company gross profit percentage for Q4? You should round your calculation to the nearest 1/10th of a percent and then enter without the percent sign (e.g. 20.6% would be entered as 20.6).

 

 

5. The Gillen Company has decided to invest in a project that is expected to produce the following cash flows: $6,000 in year 1, $8,000 in year 2 and $4,000 in year 3. The project would require a

$14,500 investment. What is the cash payback period of the project?

2.00 years

2.67 years

2.88 years

2.46 years

2.13 years