Question
2016 2017 Cash and marketable securities $50,000 $50,000 Accounts receivable $300,000 $350,000 Inventories $350,000 $500,000 Total current assets $700,000 $900,000 Accounts payable $200,000 $250,000 Bank
2016 2017
Cash and marketable securities $50,000 $50,000
Accounts receivable $300,000 $350,000
Inventories $350,000 $500,000
Total current assets $700,000 $900,000
Accounts payable $200,000 $250,000
Bank loan $- $150,000
Accruals $150,000 $200,000
Total current liabilities $350,000 $600,000
Suppose the Robinson Company had a cost of goods sold of $1,000,000 in 2016 and $1,200,000 in 2017.
a. Calculate the inventory turnover for each year. Comment on your findings.
b. What would have been the amount of inventories in 2017 if the 2016 turnover ratio had been maintained?
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
15th edition
1337671002, 978-1337395250
