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Pecunious Products, Inc.'s financial results for the past three years are summarized below: Sales trend ... Current ratio Acid-test ratio Accounts receivable turnover Inventory turnover
Pecunious Products, Inc.'s financial results for the past three years are summarized below: Sales trend ... Current ratio Acid-test ratio Accounts receivable turnover Inventory turnover .... ..... Year 3 128.0 2.5 0.8 9.4 6.5 Year 2 115.0 2.3 0.9 10.6 7.2 Year 1 100.0 2.2 1.1 12.5 8.0 9/ Your boss has asked you to review these results and then answer the following questions: a. Are customers paying their accounts at least as fast now as they were in Year 1 (provide necessary explanations using the ratio given)? (weight 5%) b. Is the total of the accounts receivable increasing, decreasing, or remaining constant (provide necessary explanations using the ratio given)? (weight 5%) c. Is the level of inventory increasing, decreasing, or remaining constant (provide necessary explanations using the ratio given)? (weight 5%)
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