Below is a partial Balance sheet for Gallop Corporation from 2018 and 2019:

Gallop Corporation

Balance Sheet

December 31, 2019

2019 2018

Cash $ 130,000 $ 100,000

Accounts receivable (net) 90,000 75,000

Inventory 100,000 40,000

Plant assets 250,000 220,000

Accounts payable $ 50,000 $ 60,000

Mortgage payable 100,000 100,000

Common stock 140,000 120,000

Retained earnings 60,000 40,000

Additional information for 2019:

1. Net sales were $500,000

2. Gross profit was $220,000 and Net Income was $50,000

3. Cost of goods sold was $325,000.

4. Net cash provided by operating activities was $59,000.

5. Capital expenditures were $30,000, and cash dividends were $28,000.

Required

a) Calculate the ratios below for the 2019 year:

(a) Accounts receivable turnover

(b) Average collection period

(c) Inventory turnover

(d) Net profit margin

b) The industry averages are below. For each, comment if Blue tech is better or worse than the industry average. Also comment on a possible reason that they are better or worse than the industry average in each area.

a) Inventory Turnover: 4.00

b) Average Collection Period: 55.23

c) Net profit Margin: 11.25%