Purchase Solution

Calculate a few ratios and compare Reed's results with indus

Not what you're looking for?

Ask Custom Question

QUESTIONS
1. Calculate a few ratios and compare Reed's results with industry averages.
(Some industry averages are shown in Exhibit 4.) What do these ratios indicate?
2. Why does Holmes want Reed's to have an inventory reduction sale, and
what does he think will be accomplished by it?
3. Jim Reed had adopted a very loose working capital policy with higher
current assets than industry averages. If he merely tightens his working
capital policy to the averages, should this affect his sales?
4. Assuming that Reed's can improve its operations to be in line with the industry
averages, construct a 1995 pro forma income statement. Assume that net
sales will be reduced 5 percent to $1,938,000 but that depreciation and amortization
will not change but remain at $32,000.
5. What type of inventory control system would you suggest to Jim Reed?
6. What type of accounts receivable control would you suggest to Jim Reed?
7. Is the increase in sales related to the increase in inventory? (See Exhibit 5.)
8. What is Reed's cost of not taking the suppliers' discounts?

Purchase this Solution

Solution Summary

This solution is comprised of a detailed explanation to calculate a few ratios and compare Reed's results with industry averages.

Purchase this Solution


Free BrainMass Quizzes
Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Operations Management

This quiz tests a student's knowledge about Operations Management

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.