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kolezko [41]
3 years ago
9

Analysis of a company's financial statements: Below are simplified versions of the balance sheet and income statement for Toys b

y Tom, Inc. Use this information to answer the following question.
Income Statement

Sales $100,000
COGS $41,700
Variable Sales and Admin $10,000
Fixed Sales and Admin $5,000
Net Income $43,300
Balance Sheet

Assets
Cash $10,000
Acconts Receivable $5,000
Inventory $10,000
Liabilities
Accounts Payable $5,000
Notes Payable $5,000
Shareholder's Equity
Common Stock $5,000
Retained Earnings $10,000
A 15% increase in inventory turns for Toys by Tom, Inc. would bring this ratio to _____, suggesting _____ in _____.

109 days; a deterioration; profitability

3.9 days; a deterioration; profitability

4.8 times; an improvement; efficiency

3.9 times; an improvement; efficiency
Business
1 answer:
il63 [147K]3 years ago
6 0

Answer:

The answer is:

A 15% increase in inventory turns for Toys by Tom, Inc. would bring this ratio to 4.8 times, suggesting improvement in efficiency.

Explanation:

We have the current Inventory turnover = COGS / Inventory = 41,700/10,000 = 4.17 times

=> An 15% increase in the Inventory turnover will bring the Inventory turnover ratio to: 4.17 x 1.15 = 4.8 times;

Increasing in inventory turnover may be the result of higher sales ( thus higher COGS) or low level of inventory holding - thus limiting the resources spending on idle inventory. So, higher level of inventory turnover in someways suggesting improvement in efficiency.

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1. Which of the following is NOT a general characteristic of a service? A. Production and consumption are simultaneous. B. The s
Snezhnost [94]

Answer:

B. The service can be transported

Explanation:

Service relates to providing an intangible form of work which is performed for others to yield a benefit or satisfy a want. An important aspect of a service being, it is intangible or something which cannot be touched or felt.

For example, service provided by a doctor or services provided by a waiter at a hotel. Services are consumed, the moment they are produced. For instance, services of a waiter arise when a customer enters the hotel and a want for the service is created.

Services cannot be resold as for instance the receiver performs the same service to another, the provider would change.

As services are intangible, they cannot be stored since they arise only when a want arises and are consumed immediately.

Thus, the correct option is B. The service can be transported.

5 0
3 years ago
A company is offering perpetual preferred stock (its dividend payments last forever) with a fixed annual dividend of $100. If yo
sukhopar [10]

Answer:

833.33

Explanation:

The fixed annual dividend is $100

The required rate of return on this investment is 12%

Therefore the value for each share can be calculated as follows

= 100/(12/100)

= 100/0.12

= 833.33

Hence the value for each share is 833.33

8 0
3 years ago
Which of the following statements about employer prejudice is true?
Andrews [41]

Answer:

D. It would be impossible for employer prejudice to exist in a firm that sells its output in a competitive market unless all rivals also discriminate.

Explanation:

In a competitive market , efficiency of employee is the only factor that is taken into account to meet the challenges of the market . The employer can not afford the cost of being prejudiced against a staff because it only has deleterious effect on the morale of the employee. So in a competitive market ,there is no scope for employer's prejudice.

4 0
3 years ago
Avicorp has a $ 12.9 million debt issue​ outstanding, with a 5.9 % coupon rate. The debt has​ semi-annual coupons, the next coup
zloy xaker [14]

Answer:

a)

Pre-tax Cost Of Debt = 7.64%

b)

Tax Rate = 40%    

Post Tax cost of debt = 7.33% * (1 - 40%) = 4.58%  

So Post Tax cost of Debt = 4.58%

Explanation:

Bond Par Value =  12,900,000  

Bond Market Price 93% of face value = 11,997,000  

Years To maturity = 5.00  

Annual Interest 5.9% = 761,100

Formula = [Annual Interest + (Par Value-Market Value) / Years to Maturity] / [(Par value+Market Price*2)/3]

Year To Maturity = [761100 + (12900000 - 11997000) / 5] / (12900000 + 2*11997000) / 3

Year to maturity = 7.33%

8 0
3 years ago
In situation with high risk,credit might create further problems for the borrower.explain.​
rewona [7]

Answer:

Yes, In situation of high risk credit will create more problem due to bankruptcy.

Explanation:

I Think if business will buy more credit in times of high risk then business will end up in stage of bankcruptcy because in that situation business will making poor profits and no revenue so it won't be able to pay back debt.

3 0
3 years ago
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