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    Asset activity ratios

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    ABC Fitness Company 000's
    INCOME STATEMENT Dec. 99
    Sales 1968.016
    Cost of Goods Sold 1466.733
    Gross Profit 501.283
    Selling and Ad. Expenses 361.402
    Depreciation 35.7
    Operating Income (EBIT) 104.181
    Interest Expense 34.482
    Other Expense 14.124
    EBT 83.823
    Taxes 24.701
    Net Income 59.122
    BALANCE SHEET 000's
    Assets
    Cash 89.469
    Net Receivables 55.514
    Inventories 322.433
    Prepaids 8.775
    Total Current Assets 476.191
    Gross Plant & Equipment 955.661
    Accumulated Dep 338.513
    Net Plant & Equip 617.148
    Other Assets 24.621
    Total Assets 1117.96
    Liabilities
    Notes Payable 1.127
    Accounts Payable 144.638
    Taxes Payable 16.797
    Accrued Expense 98.233
    Total Current Liabilities 260.795
    Long-Term Debt 415.138
    Deferred Taxes 20.396
    Total Liabilities 696.329
    Equity
    Common Stock 0.32
    Capital Surplus 242.843
    Retained Earnings 178.468
    Total Equity 421.631
    Total Liabilities and Equity 1117.96
    Calculate the following asset activity ratios for the end of 1999.
    1. Average Collection Period
    2. Inventory Turnover
    3. Total Asset Turnover
    After you calculate the ratios, please tell me which ratio is the most important or critical to monitor as regards to ABC Fitness, Please explain why.

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    https://brainmass.com/business/capital-asset-pricing-model/asset-activity-ratios-21998

    Solution Preview

    Sales:

    Annual= 1,968.016

    Per day= 5.3918 =1968.016 / 365

    Cost of goods sold= 1,466.733

    Inventory= 322.433

    Net Receivables = 55.514

    Total Assts= 1117.96

    1. Average Collection Period

    Average Collection period=Accounts receivables period=Avergae accounts receivables/(Annual ...

    Solution Summary

    Asset activity ratios (Average Collection Period, Inventory Turnover, Total Asset Turnover) have been calculated for the company.

    $2.19

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