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Company Analysis

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I'm trying to analyze a company's performance. I have the ratio's per year figured out, but there are still questions I have pertaining to the company.

1. Is the investment in accounts receivable decreasing?
2. Is the investment in plant assets increasing?
3. Is the owner's investment becoming more profitable?
4. Did the dollar amount of selling expenses decrease during the three year period?

Please see attached for full question.

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1. Is the investment in accounts receivable decreasing?
accounts receivable turnover = total credit sales / accounts receivable
Thus account receivable = Total sales / account receivable turnover
From the calculation, we find that the account receivable ...

$2.19
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Random Sample

A recent article in Buisness Week listed the best small companies. We are interested in the current results of the companies sales and earnings. A random sample of 12 companies was selected and the sales and earnings, in millions of dollars, are reported below.

Company Sales Earnings
($ millions) ($ earnings)

Papa John's International 89.2 4.9

Applied Innovation 18.6 4.4

Integracare 18.2 1.3

Wall Data 71.7 8.0

Davidson Associates 58.6 6.6

Chico's Fas 46.8 4.1

Company Sales Earnings
($ millions) ($ millions)

Checkmate Electronics 17.5 2.6

Royal Grip 11.9 1.7

M-Wave 19.6 3.5

Serving-N-Slide 51.2 8.2

Daig 28.6 6.0

Cobra Golf 69.2 12.8

Let sales be the independent variable and earnings be the dependent variable.

A. Draw a scatter diagragm.

B. Compute the co-efficient of correlation.

C. Compute the co-efficient of determination.

D. Interpret your findings in part B and C.

E. Determine the regression equation.

F. for a small company with 50.0 million in sales, estimate the earnings.

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