Question
Low's Companies, a home improvement store chain, reported the following summarized figures: Compute the inventory turnover, days' sales in inventory, and gross profit percentage for
Low's Companies, a home improvement store chain, reported the following summarized figures:
Compute the inventory turnover, days' sales in inventory, and gross profit percentage for Low's Companies for 2018. |
Compute days' sales in receivables during 2018. Round intermediate calculations to three decimal places. Assume all sales were on account. |
What do these ratios say about Low's Companies' ability to sell inventory and collect receivables? |
Low's CompaniesLow's has 30,000 common shares outstanding during 2018.
Income Statement
Years Ended May 31, 2018 and 2017
2018 2017
Net Sales Revenue $46,500 $39,800
Cost of Goods Sold 22,500 29,300
Interest Expense 700 460
All Other Expenses 6,200 8,400
Net Income $17,100 $1,640
Low's Companies
Balance Sheet
May 31, 2018 and 2017
Assets Liabilities
2018 2017 2018 2017
Cash $2,100 $1,300 Total Current Liabilities $22,000 $13,000
Short-term Investments 25,000 14,00 Long-term Liabilities 12,400 12,200
Accounts Receivable 7,100 5,700 Total Liabilities 34,400 25,200
Merchandise Inventory 7,300 7,200
Stockholders' Equity
Other Current Assets 7,000 2,400
Common Stock 9,000 9,000
Total Current Assets 48,500 30,600
Retained Earnings 39,100 19,400
All Other Assets 34,000 23,000
Total Equity 48,100 28,400
Total Assets $82,500 $53,600
Total Liabilities and Equity $82,500 $53,600
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