The same is noticeable for total liabilities.
c. The trend showed gradual increases for all components of the balance sheet, showing a regular and sustained development of the company. Some of these however had a more sustained ascending trend.
5-4. a.
Revenue from services
Net earnings b. As compared to the 2004 base, net earnings have increased in 2006 with almost 200%, similar figures being noticeable in comparison with 2004 to many of the other figures on the statement of earnings.
6-2. a. days' sales in receivables 2007 =
220,385/$3,233 = 68.17 days' sales in receivables 2006 =
240,360/$6,027 = 39.88 b. accounts receivables turnover 2007 =
1,180,178/220,385 = 5.355 accounts receivables turnover 2006 =
2,200,000/240,360 = 9.15 c. Both ratios show that the company's liquidity has decreased, mainly due to bad collection policies.
6-6. a. The days' sales in inventory = ($360,500/$2,100,000) * 365 = 62.65 b. This is probably just a preliminary measure in actually evaluating the real days' sales in inventory and the...
However, it is probably a good reflection of the actual days' sales in inventory.
c. As mentioned, it would be a good starting point and an initial helpful guide in the process.
6-13. a. Company D - current ratio = 2
Company E - current ratio = 1.29
Company D's current ratio is higher than Company E's, however, the general principle in case of the current ratio is that this needs to be equal or higher than 1. In this particular case, it is likely that Company D. is proving too prudent in its short-term financial policy, which will tend to block some of the funds it could use for further developing the company.
6-18. Beginning Inventory + Net Purchases - Cost of Goods Sold (COGS) = Ending Inventory. Thus, Beginning Inventory + Net Purchases - Ending Inventory = Cost of Goods Sold (COGS) a. $4,000 + $16,325-600 *$5.00 = $17,325 b. $4,000 + $17,600- 600 *$5.00 = $18,600 c. Average cost = $5.40
6-19. a. 2007-2.4
2006-2.3
2005-2.08 b. The sales to working capital is significantly lower…
