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    Financial Accounting: Three practice problems on turnover ratios

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    The Speed-O Company makes scooters for kids. Sales in 2008 were $8,000,000. Assets were as follows:
    cash $200,000
    Accounts receivable 1,600,000
    inventory 800,000
    net plant and equipment 1,000,000
    total assets 3,600,000

    Requirement 1:
    Compute the following(round your answer to 2 decimal places)
    accounts receivable turnover ______________
    inventory turnover ______________
    fixed asset turnover ______________
    total asstes urnover ______________

    Requirement 2:
    In 2009, sales increased to $10,000,000 and the assets for that year were as follows:

    cash $200,000
    acoounts receivable 1,800,000
    inventory 2,200,000
    net plant and equipment 1,050,000
    total assets 5,250,000

    Once again, compute the four ratios.

    accounts receivable turnover ____________
    inventory turnover ____________
    fixed asste turnover ___________
    total assets turnover ___________

    Requirement 3:

    Indicate if there is an improvement or decline in total asset turnover.

    A. Improvement
    B. Decline

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    Solution Summary

    The expert examines the three practice problems on turnover ratios.