The following information was contained in the annual financial statements of Cone Company, which started business January

Question:

The following information was contained in the annual of Cone Company, which started business January 1, 2011 (assume account balances only in Cash and Capital Stock on this date; all amounts are in thousands of dollars).

2011 2012 2013 2014 Accounts receivable (net; terms n/30) Merchandise inventory Net sales (3/4 on credit) Cost of goods

Required (show computations):
1. Complete the following tabulation
Items 2011 2012 2013 2014
a. Profit margin percentage
b. Gross profit ratio
c. Expenses as percentage of sales, excluding cost of goods sold
d. Inventory turnover ratio
e. Days€™ supply in inventory
f. Receivable turnover ratio
g. Average days to collect
2. Evaluate the results of the related ratios a, b, and c to identify the favorable or unfavorable factors. Give your recommendations to improve the company€™s operations.
3. Evaluate the results of the last four ratios (d, e, f, and g) and identify any favorable or unfavorable factors. Give your recommendations to improve the company€™soperations.

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...