QUESTION 35

1. Use the information that follows taken from Campbell Companys financial statements for the years ending December 31, 2017 and 2016.

   Campbell Company Financial Statements

   Balance Sheet Information	2017	2016
   Assets
   Cash	$25	$50
   Accounts receivable	60	70
   Inventory	40	30
   Land, building, and equipment	225	250
   Total Assets	$350	$400
   Liabilities and Shareholders' Equity
   Accounts payable	$85	$100
   Long term note payable	180	200
   Common stock	150	150
   Retained earnings	(65)	(50)
   Total Liabilities & Shareholders' Equity	$350	$400
   Income Statement Information
   Sales (all sales are on credit)	$850
   Cost of goods sold	425
   Gross profit	425
   Operating expenses	440
   Net income	$(15)
   	.

   Calculate Campbells inventory turnover ratio and accounts receivable turnover ratio for the year ended 2017. Further, assume that in Campbells industry, the industry average inventory turnover ratio is 12 and the industry average receivables turnover ratio is 14.

   Which of the following statements are true:

   		Campbells inventory turnover ratio and accounts receivable turnover ratios are better than average for Campbells industry.
   		Campbells inventory turnover ratio and accounts receivable turnover ratios are worse than average for Campbells industry.
   		Campbells inventory turnover ratio is better but the accounts receivable turnover ratio is worse than average for Campbells industry.
   		Campbells inventory turnover ratio is worse and accounts receivable turnover ratio is better than average for Campbells industry.