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    Asset Activity Ratios

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    I need to calculate the following asset activity ratios for the end of 1999.

    1. Average Collection Period
    2. Inventory Turnover
    3. Total Asset Turnover.

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    https://brainmass.com/business/financial-ratios/asset-activity-ratios-37088

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    Solution Preview

    Please refer to file response attached (which I would recommend), which is also presented below. I hope this helps and take care.

    RESPONSE:

    1. Use the following information to answer the three questions that follow:

    ABC FITNESS COMPANY
    INCOME STATEMENT December-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 84.469
    Net Receivables 55.514
    Inventories 322.433
    Prepaids 8.775
    Total Current Assets 476.191
    Gross Plant & Equipment 955.661
    Accumulated Depreciation 338.513
    Net Plant and Equipment 617.148
    Other Assets 24.621
    Total ...

    Solution Summary

    This solution computes three asset activity ratios.

    $2.19

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