Selected data from Anthony Company follow. Required Compute the following: a. The accounts receivable turnover for 2008.
Question:
Selected data from Anthony Company follow.
Required
Compute the following:
a. The accounts receivable turnover for 2008.
b. The inventory turnover for 2008.
c. The net margin for2008.
Balance Sheet Data As of December 31 2008 Accounts receivable Allowance for doubtful accounts Net accounts receivable Inventories, lower of cost or market 2007 S380,000 $350,000 S490,000 40,000 30,000 $450,000 $600,000 $480,000 Income Statement Data For the Year Ended December 31 2008 2007 Net credit sales Net cash sales Net sales Cost of goods sold Selling, general, and administrative expenses Other expenses Total operating expenses $2,000,000 S1,760,000 320,000 2,080,000 1,440,000 216,000 24,000 $1,880,000 $1,680,000 400,000 2,400,000 1,600,000 240,000 40,000
Step by Step Answer:
a Net credit sales Average accounts receiva...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.
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