The following information is available for Orkay Company and Lowes Company, similar firms operating in the same
Question:
Orkay Lowes 2010 2009 2008 2010 2009 2008 Current ratio Acid-test ratio Accounts receivable turnover Merchandise inventory turnover Working capital 0.9 29.5 23.2 1.7 1.0 24.2 20.9 2.0 1.1 28.2 16.1 3.1 2.7 15.4 13.5 2.6 2.4 14.2 12.0 1.8 1.5 15.0 11.6 $60,000 $48,000 $42,000 $121,000 $93,000 $68,000
Step by Step Answer:
Lowes has a greater amount of working capital This by itself does not indicate whether the company i...View the full answer
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
Students also viewed these Managerial Accounting questions
-
The following information is available for Barkley Company at December 31, 2008, regarding its investments. Instructions (a) Prepare the adjusting entry (if any) for 2008, assuming the securities are...
-
The following information is available for a bank account: Note that the money earns interest which is computed as Interest = iBi where i = the interest rate expressed as a fraction per month, and Bi...
-
The following information is available for Gerard Corporation (a) Compute earnings per share for 2012 and 2011 for Gerard, and comment on the change. Gerard??s primary competitor, Thorpe Corporation,...
-
A trader has a soft limit of $8MM USD and a hard limit of $10MM USD. Their current NOP is $3MM USD. They purchase $6MM USD, sell $1MM USD, and then purchase another $5MM USD. Which of the following...
-
Use the information for Kyle Inc. given in BE18-15. Assume now that Kyle earns taxable income of $25,000 in 2015 and that at the end of 2015 there is still too much uncertainty to recognize a...
-
Have the gains in student learning attributed to education technology justified colleges spending in this area? As part of Inside Higher Eds 2016 Survey of Faculty Attitudes on Technology,...
-
Estimate average particle diameter, mass transfer coefficients, and mixer stage efficiency for extraction of benzoic acid from water into toluene for Example 13-7. Example 13-7 Design a baffled...
-
Suppose a fast-food restaurant wishes to estimate average sales volume for a new menu item. The restaurant has analyzed the sales of the item at a similar outlet and observed the following results:...
-
The Professional Test Writers Association is a private, not-for profit organization, that has 2000 members. A membership costs $500 per for year and the member receives benefits with a fair value of...
-
FIGURE P26.41 is an edge view of three charged metal electrodes. Let the left electrode be the zero point of the electric potential. What are V and E at (a) X = 0.5 cm, (b) X = 1.5 cm, (c) X = 2.5...
-
Express the following comparative income statements in common-size percents and assess whether or not this companys situation has improved in the most recentyear. MULAN CORPORATION Comparative Income...
-
Caren Company and Revlon Company are similar firms that operate in the same industry. Revlon began operations in 2009 and Caren in 2006. In 2011, both companies pay 7% interest on their debt to...
-
Why is multiple regression often more useful than simple linear regression?
-
a. What is lapping? b. What internal control principles will prevent or detect this irregularity? c. What test of transactions may detect lapping?
-
Contrast the different steps that are required in reviewing internal controls under the second standard of field work between a manual and an EDP system.
-
a. What is a proof of cash? b. What type of test is a proof of cash? c. How should a proof of cash be prepared? d. Explain the treatment of reconciling items in a proof of cash.
-
Discuss the applicability of GAAS in an EDP system and the extent of knowledge needed by a general audit staff member to meet the first genera! standard.
-
State the steps in the audit program for the tests of transactions in a manual system that may involve the use of a random sample.
-
Alexander Mann Solutions (AMS) provides Recruitment Process Outsourcing (RPO) and consultancy services to 45 major clients. They were the first to introduce the concept of RPO in 1996 and are now the...
-
Write a paper about the Working relationship in the organization- collaboration within and outside the organization
-
Consider the confidence interval estimate discussed in Problem 8.5. Suppose the population mean time spent on the site is 36 minutes a day. Is the confidence interval estimate stated in Problem 8.5...
-
At the beginning of April, Brooke Gable launched a custom computer solutions company called Softways. The company had the following transactions during April. a. Brooke Gable invested $45,000 cash,...
-
The accounting records of Schmit Co. show the following assets and liabilities as of December 31, 2010 and 2011. Late in December 2011, the business purchased a small office building and land for...
-
Lummus Management Services opens for business and completes these transactions in September. Sept. 1 Rhonda Lummus, the owner, invests $28,000 cash along with office equipment valued at $25,000 in...
-
Sara came across a new website that featured a "live" fortune-teller. She typed in three questions and found (shockingly) that the fortune-teller could only answer yes or no to her questions....
-
Balance Sheet 2 0 0 7 2 0 0 8 2 0 0 7 2 0 0 8 Cash $ 1 , 7 0 0 $ 1 , 6 0 0 Accounts payable $ 1 3 , 8 0 0 $ 1 2 , 9 0 0 Accounts receivable 1 4 , 3 0 0 1 7 , 4 0 0 Long - term debt 4 7 , 5 0 0 4 8 ,...
-
Suppose you observe a spot exchange rate of $2.00/. If interest rates are 5 percent APR in the U.S. and 2 percent APR in the U.K., what is the no-arbitrage 7-year forward rate? Hint: in (USD/GBP)...
Study smarter with the SolutionInn App