Rhondda McNabb always asks her adviser in-depth questions before acquiring a company?s shares. Rhondda is currently considering
Question:
Rhondda McNabb always asks her adviser in-depth questions before acquiring a company?s shares. Rhondda is currently considering investing in Simpson Scientific Corp. Simpson?s annual report contains the following summary of ratios:
Rhondda would like answers to the following questions about the trend of events over the three-year period covered in the annual report. Rhondda?s questions are:
1. Is it becoming easier for Simpson to pay its current debts on time and to take advantage of cashdiscounts?
2. Is Simpson collecting its accounts receivable more rapidly?
3. Is Simpson?s investment in accounts receivable decreasing?
4. Are dollar amounts invested in inventory increasing?
5. Is Simpson?s investment in PPE assets increasing?
6. Is the shareholders? investment becoming more profitable?
7. Is Simpson using its assets efficiently?
8. Did the dollar amount of selling expenses decrease during the three-year period?
Step by Step Answer:
Fundamental Accounting Principles Volume II
ISBN: 978-1260305838
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann