ch13 Q1

Simon Company's year-end balance sheets follow.

At December 31	Current Year	1 Year Ago	2 Years Ago
Assets
Cash	$ 30,932	$ 36,525	$ 39,616
Accounts receivable, net	92,394	63,273	51,252
Merchandise inventory	111,567	85,318	56,823
Prepaid expenses	10,164	9,975	4,445
Plant assets, net	289,908	266,086	244,064
Total assets	$ 534,965	$ 461,177	$ 396,200
Liabilities and Equity
Accounts payable	$ 130,542	$ 77,160	$ 53,867
Long-term notes payable	98,562	107,131	89,311
Common stock, $10 par value	163,500	163,500	163,500
Retained earnings	142,361	113,386	89,522
Total liabilities and equity	$ 534,965	$ 461,177	$ 396,200

For both the current year and one year ago, compute the following ratios:

The companys income statements for the current year and one year ago follow. Assume that all sales are on credit:

For Year Ended December 31	Current Year		1 Year Ago
Sales		$ 695,455		$ 548,801
Cost of goods sold	$ 424,228		$ 356,721
Other operating expenses	215,591		138,847
Interest expense	11,823		12,622
Income tax expense	9,041		8,232
Total costs and expenses		660,683		516,422
Net income		$ 34,772		$ 32,379
Earnings per share		$ 2.14		$ 1.99

(1-a) Compute days' sales uncollected. (1-b) Determine if days' sales uncollected improved or worsened in the current year. (2-a) Compute accounts receivable turnover. (2-b) Determine if accounts receivable turnover ratio improved or worsened in the current year. (3-a) Compute inventory turnover. (3-b) Determine if inventory turnover ratio improved or worsened in the current year. (4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if days' sales in inventory improved or worsened in the current year.