Purchase Solution

Financial Ratios

Not what you're looking for?

Ask Custom Question

Financial Ratios:

Given below are comparative balance sheets and an income statement for the Richmond Corporation...Please see attachment for table

All sales were made on account. Cash dividends declared during the year totaled $57, 150. Compute the following:

a) Average accounts receivable turnover
b) Average inventory turnover
i) Return on assets
j) Return on common stockholders' equity

Please see attachment for all questions

Purchase this Solution

Solution Summary

The comparative balance sheets and income statements are examined. The inventory turnover averages are determined.

Solution Preview

(a)The accounts receivable turnover is determined by net sales/receivables. Since they are asking for average accounts receivable turnover, you need to use the average receivables for the period, or (90000 + 74000)/2. So the ratio would be found using:
410000/82000 = 5. This means that accounts receivable turns over 5 times a year, or every 365/5 = 73 days.
(b) Average inventory turnover is similar, but using the average inventory for the year, ...

Purchase this Solution

Free BrainMass Quizzes

This tests some key elements of major motivation theories.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

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.

Introduction to Finance

This quiz test introductory finance topics.