You will be computing different financial ratios based on information presented in the tables below. Chart 1
Question:
You will be computing different financial ratios based on information presented in the tables below.
Chart 1
ABC GROUP123 COMPANY
Beginning Accounts Receivable $75, 000 $92, 000
Ending accounts receivable $125, 000 $123, 000
Net credit sales $324, 000 $401, 000
Chart 2
Balance sheet year 1 Income statement year 1 Balance sheet year 2 Income statement year 2
Beginning inventory $29, 000 $10, 826
Purchases $10, 000 $7, 435
Goods available for sale $39, 000 $18, 261
Ending inventory $10, 000 $5, 980
Cost of goods sold $28, 174 $12, 281 $10, 826
Please complete the following tasks:
1. Complete each of the calculations listed below (A - C).
A. (Use Chart 1) You are an investor looking to contribute financially to either the ABC Group or the 123 Company. Based on the information provided:
*Compute the accounts receivable turnover ratio.
*Compute the number of days' sales in receivables ratio for both ABC Group and 123 Company (round all answers to two decimal places).
*Interpret the outcomes, stating which company you would invest in and why.
B. (Use Chart 2) Compute the inventory turnover ratio.
*Interpret the outcomes
C. (Use Chart 2) Compute the number of days' sales in inventory ratio.
*Interpret the outcomes
2. Interpret the outcomes for each of the calculations performed using chart 1 and chart 2 (A - C).
3. Did you encounter issues completing any Unit 5 assignments? Please explain.
4. You are halfway through the course. What are your thoughts about the course and the material that has been covered at this point?