All categories

4 years ago

Sandhill Co. has these comparative balance sheet data:

Business

1 answer:

lora16 [44]4 years ago

4 0

Answer:

Consider the following calculations

Explanation:

(a)-Current Ratio

Current Ratio = Total current assets / Total current liabilities

= [Cash + A/R + Inventory] / Accounts Payables

= [$33,450 + $156,100 + $133,800] / $111,500

= $323,350 / $111,500

= 2.90

(b)-Accounts Receivables Turnover

Accounts Receivables Turnover = Net credit sales / Average accounts receivables

= [$377,100 - $27,600] / [($156,100 + $133,800)/2]

= $349,500 / $144,950

= 2.4 Times

(c)-Average collection period

Average collection period = 365 Days / Accounts Receivables Turnover

= 365 Days / 2.4 Times

= 152.1 Days

(d)-Inventory Turnover

Inventory Turnover = Cost of goods sold / Average Inventory

= $200,200 / [($133,800 + $111,500)/2]

= $200,200 / $122,650

= 1.63 Times

(e)-Days in Inventory

Days in Inventory = 365 Days / Inventory Turnover

= 365 Days / 1.63 Times

= 223.9 Days

(f)-Free Cash Flow

Free Cash Flow = Net cash provided by operating activities – Capital expenditures – Dividends paid

= $56,000 - $28,200 - $19,300

= $8,500

You might be interested in

A Purchasing Specialist is sometimes referred to as what? Select all that apply *

Zepler [3.9K]

$\text{Hello there!}$

A Purchasing Specialist is sometimes referred as a $\bold{Procurement Manager.}$

This is because they're responsible for purchasing/procuring supplies.

They relatively have the same roles, however, occasionally referred to by different names.

$\text{The job of the}$ $\bold{Purchasing\;Manager}$ $\text{\;is to purchase supplies for the company.}$

$\text{For example, purchasing lettuce for a}$ $\bold{fast\;food\;restaurant.}$

$\text{The job of the\;}$ $\bold{Purchasing\;Agent}$ $\text{is to buy supplies that the company needs.}$

$\text{The job of the}$ $\bold{Procurement\;Manager}$ $\text{has the same responsibilities as the}$ $\bold{Purchasing\;Manager.}$

Therefore, all of the possible referred answers are going to be correct.

The only differences are going to be the names.

$\rule{300}{1.0}$

8 0

3 years ago

Indicate the effect that the following will have on the operating cycle. Use the letter "I" to indicate an increase, the letter

sveta [45]

Answer: a. Increase

b. Increase

c. Decrease

d. No change

e. Decrease

f. No change

Explanation:

The Operating cycle refers to the amount of time it will take a business to source or produce inventory, sell that inventory and then receive the money for the sold inventory.

a. If the Average Receivables goes up, then that means there are more people to collect money from. This will increase the amount of time it will take to collect thereby increasing the operating cycle.

b. If the credit repayment times for the customers are increased, this means that the time they have to take to pay the company increases and this will definitely increase the Operating cycle.

c. If the inventory turnover increases, it means that inventory is being purchased more times in the period. This means that the operating cycle has decreased because the company is having to replace inventory more to begin a new cycle.

d. The Payables turnover rate does not feature in the operating cycle so no effect will be recorded.

e. If the Receivables turnover rate increases, it means that the company is getting paid by receivables faster. This will decrease the operating cycle because it means that the business is receiving its money faster.

f. Payments to suppliers is just another way of saying Account Payables and as stated already, it has nothing to do with the Operating Cycle so No effect will be recorded.

6 0

4 years ago

True or false: The Asia-Pacific Economic Cooperation (APEC) is a trade alliance that promotes trade and economic integration amo

Mademuasel [1]

False...
hope this helps <3

4 0

2 years ago

An increase in the price of a substitute good will cause the equilibrium price of its substitute to _______ and the equilibrium

irinina [24]

Answer:

(b). Increase ; Decrease

Explanation:

When the price of a substitute good rises, then it becomes more profitable for suppliers to shift to the other good. Therefore the supply of given good decreases, and the supply curve shifts leftward.

For example, if you're a textile manufacturer who produces cotton and silk clothes if the price of silk rises you'll reduce cotton production to divert resources towards silk. Therefore the demand for cotton clothes reduces.

Due to the leftward shift of the supply curve, the equilibrium price increases and equilibrium quantity decreases.

So we can conclude that an increase in the price of a substitute good will cause the equilibrium price of its substitute to increase and the equilibrium quantity to decrease.

Hence, the option (b) is the correct option.

6 0

3 years ago

A company is considering the expansion of its current facility to meet increasing demand. A major expansion would cost $500,000,

Karolina [17]

Answer:

0.7

Explanation:

States of Nature

Alternatives Demand is High Demand is Low

Major Expansion $800, 000 - $500,000 -$500,000 -$500,000

Minor Expansion $200, 000 - $200,000 -$100, 000 - $200,000

Doing Nothing $0 $0

States of Nature

Alternatives Demand is High Demand is Low

Major Expansion $300,000 -$1,000,000

Minor Expansion $0 -$300,000

Doing Nothing $0 $0

Let D to be the probability of the high demand;

Then:

300,000 × D - 1,000,000 × (1 - D) = 0 × D - 300,000 × (1 - D)

300,000D - 1,000,000 - 1,000,000D = -300,000 + 300, 000D

-700,000 D -1,000,000 = -300,000 + 300,000 D

-1,000,000 + 300,000 = 700,000 D + 300,000 D

700,000 = 1,000, 000 D

D = 700,000/1,000,000

D = 0.7

∴ the probability of a high demand that the company will be indifferent between the two expansion alternatives = 0.7

8 0

3 years ago