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I need help understanding the information below base on General Electric (GE) base on its SEC 10K REPORT Days Sales in A/R = Ending Balance
I need help understanding the information below base on General Electric (GE) base on its SEC 10K REPORT
Days Sales in A/R = Ending Balance in Accounts Receivable/ [Sales Revenues / 365]
Days' Sales in Inventory = Ending Inventory Balance/[Cost of Goods Sold / 365]
Calculating ratios is only the first step in the analysis process. The ratios results need interpretation.
- What does the result indicate about the financial performance?
- Consider how these values are changing. Interpret these changes as positive or negative for the corporation. What can be done to counteract negative trends or continue with positive trends? What actions do you recommend management take?
- Also, relate changes in revenues and cost of goods sold values to changes in accounts receivable and inventory from year to year. Do the changes in revenues and cost of goods sold agree with the changes in accounts receivable and inventory?
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