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spin [16.1K]
3 years ago
14

You are the financial analyst at Sew Mart, an arts and crafts retail store. Your boss has asked you to review the company's fina

ncial results for the past three years and to provide an analysis of your findings: Sew Mart Ratios 20x9 20x8 20x7 Sales trend 162 22.1 25.1 Current ratio 0.78 1.90 2.20Acid-test ratio 0.40 1.32 1.90Accounts receivable turnover 41.29 33.20 10.60Inventory turnover 3.58 6.25 7.80Incorporate the following questions into your discussion of the company's financial performance. 1. Has your company performed worse, better, or about the same? 2. Should you be concerned about any ratio noted in your analysis? 3. What recommendations would you share with your boss on the financial health of the company?
Business
1 answer:
mario62 [17]3 years ago
8 0

Answer:

1. It has worsened

2. Yes (refer details below)

3. Refer details below

Explanation:

1. Performance

The performance of the company over the last three years has worsened as indicated by declining sales and decreasing current ratios impacting profitability and liquidity of the company.

2. Concerns

One of the most important concern for the company is its declining sales. It shows that the products are not competitive. Current ratios indicates liquidity crisis since they are decreasing.

3. Recommendations

The company's turnover ratio is high, which may indicates payments are being received timely, and hence the co. should take advantage of that

Low inventory turnover, on the other hand, indicates weaker sales and declining demand for a company’s products which is corroborated by the declining sales trend, the co. must increase its sales, launch new products, advertise aggressively.

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The LaGrange Corporation had the following budgeted sales for the first half of the current year:
Oxana [17]

Answer:

$168,250

Explanation:

Total Cash Collection would include cash collected from both Cash Sales and Credit Sales.

<u>Summary for Calculation of January Cash Collected</u>

Cash Sales                                                        $60,000

Credit Sales :

For January Sales ($160,000 × 45%)              $72,000

For December Sales ($55,000 × 55%)           $30,250

For November Sales ($30,000 × 20%)             $6,000

Total Collection                                               $168,250

Conclusion :

The total cash collected during January by LaGrange Corporation would be $168,250

3 0
3 years ago
To reduce the amount of time it takes to apply packaging to its finished products, North Star Foods is implementing new equipmen
Veronika [31]

Answer: Primary activity.

Explanation:

Value chain analysis occurs when an organization carefully analyses their activities to know areas they need to maintain and areas to improve on, to excel above their competitors. When an organization introduces new equipments to help enhance production, they are trying to improve on operations which is a primary activity in value chain analysis.

6 0
3 years ago
A company purchased $6,000 worth of supplies in August. On August 31, the balance in the Supplies account was $3,200. The adjust
Doss [256]

Answer:

The answer is C. Debit to Supplies for $2,800

Explanation:

Supplies of worth $6,000 was purchased in Aug.

And on Aug. 31, $3,200 balance was left.

That means $2,800($6,000 - $3,200) has been used.

The supplies expense account will he debited for $2,800.

Note that expense increases with debit and credit decreases expense.

Option B, D, E are wrong because the expense increases and not decreases.

3 0
3 years ago
Brian is a truck driver who delivers products throughout Massachusetts. His friend Chris is a traffic planner for the same state
Bond [772]

Answer:

a

Explanation:

7 0
3 years ago
Tom Johnson Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposa
lilavasa [31]

Answer:

For 8,500 units, proposal A provides a higher income ($3,000).

Explanation:

Giving the following information:

Proposal A:

Fixed cost= $50,000

Unitary cost= $12

Proposal B:

Fixed cost= $70,000

Unitary cost= $10

<u>We need to choose the proposal with the higher income if 8,500 units are produced.</u>

Proposal A:

Net income= 8,500*(20 - 12) - 50,000

Net income= $18,000

Proposal B:

Net income= 8,500*(20 - 10) - 70,000

Net income= $15,000

For 8,500 units, proposal A provides a higher income ($3,000).

7 0
3 years ago
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