Answer:
c. The management of Ace should consider the effect of slow moving inventory on its liquidity.
Explanation:
Liquidity is an important measure of a company's financial health, its calculation determines how well the company can pay off your short-term debts. Inventory has a great impact on liquidity and it depends on how easily the company can sell it. As ACE is having trouble selling its products, it means that it takes a long time to sell its inventory, which does not help its liquidity since its inventory can not be easily be transformed into cash without losing its value, and that's why this company management must consider moving inventory on its liquidity, in order to increase its current ratio, that means its ability to pay current, or short-term, liabilities (debt and payables) with its current, or short-term, assets (cash, inventory, and receivables).
If this company
Answer:
a. 120,000 units
Explanation:
The formula to compute the break even point is shown below:
= (Total fixed cost) ÷ (Contribution margin per unit)
where,
Contribution margin per unit = Selling price per unit - Variable expense per unit
= $5 - $3
= $2 per unit
And, the total fixed cost is $240,000
So, the break even point in units is
= $240,000 ÷ $2 per unit
= 120,000 units
Answer:
1.2
Explanation:
Subtract the sales to goal ratio°
=0.0
From the sales to goal ratio=1.20
=1.20-0.0= 1.2
