Low's Companies, a home improvement store chain, reported the following summarized figures 9
Lows Companies, a home improvement store chain, reported the following summarized figures: (Click the icon to view the income statement.) (Click the icon to view the balance sheets.) Low's has 20,000 common shares outstanding during 2018 Read the requirements Requirement 1. Compute the inventory turnover, days' sales in inventory, and gross profit percentage for Low's Companies for 2018 Compute the inventory turnover. (Round your answer to two decimal places, X.xx.) The inventory turnover times Compute the days' sales in inventory. (Round interim calculations to two decimal places, XXX and round your final answer to the nearest whole day.) The days' sales in inventory days Compute the gross profit percentage. (Round your answer to the nearest tenth of a percent, XX%) The gross profit percentage Requirement 2. Compute days' sales in receivables during 2018. Round intermediate calculations to three decimal places. Assume all sales were on account. (Round intermediate calculations to three decimal places, X.XXX and round your final answer to the nearest whole day) days Days' sales in average receivables Requirement 3. What do these ratios say about Low's Companies' ability to sell inventory and collect receivables? (Assume the following industry averages; inventory turnover 4.4 days's sales in inventory-82 days, gross profit percentage : 347% and days' sales in average receivables-8 17 days.) inventory turnover ratio. This could be an area to look at and compare to the prior year and Industry average. The amount of time it takes to collect receivables seemsbut this would depend on the Lows Companies have a high amount of inventory on hand and a They have a pr gross profit percentage, which is a Income Statement Low's Companies Income Statement Years Ended May 31, 2018 and 2017 2018 2017 42,100 $ 22,500 38,800 29,300 460 7,800 1,240 Net Sales Revenue Cost of Goods Sold Interest Expense All Other Expenses Net Income 500 7,500 11,600 $ Done Print Balance Sheets Low's Companies Balance Sheet May 31, 2018 and 2017 Liabilities Assets 2018 2017 2018 2017 Cash Short-term Investments Accounts Receivable Merchandise Inventory Other Current Assets Total Current Assets All Other Assets Total Assets 29,000 S 13,600 42,600 2,500 $ 1,300 Total Current Liabilities $ 13,000 Long-term Liabilities 5,600 Total Liabilities 6,800 2,300 Common Stock 13,000 10,100 26,000 7,200 6,800 6,000 23,100 Stockholders' Equity 11,000 28,900 39,900 82,500 S 11,000 18,900 29,900 53,000 48,500 34,000 82,500 $ 29,000 Retained Earnings 24,000 Total Equity 53,000 Total Liabilities and Equity Print Done
