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    Average Collection Period and Turnover Ratios

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    ABC Fitness 000's
    Income Statement Dec-05
    Sales 2004.016
    Cost of Goods Sold 1446.733
    Gross Profit 557.283
    Selling and Ad
    Expenses 361.402
    Deprciation 56.87
    Operating Income
    (EBIT) 139.011
    Interest expense 34.482
    Other Expense 14.124
    EBT 90.405
    Taxes 2 4.701
    Net Income 65.704
    Balance Sheet
    Assets
    Cash 25.32
    Net Receivables 55.514
    Inventories 141.35
    Prepaids 8.775
    Total Current
    Assests 230.959
    Gross Plant &
    Equipment 213.34
    Accumulated
    Depreciation 161.7
    Net Plant &
    Equipment 507.34
    Other Assets 4.621
    Total Assests 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
    Defferred 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

    Use the annual information found here to answer this assignment. Calculate the following asset activity ratios for the end of 2005:
    Average Collection Period
    Inventory Turnover
    Total Asset Turnover
    To receive full credit on this assignment, please show all work, including formulae and calculations used to arrive at financial values.

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    Solution Preview

    ABC Fitness 000's
    Income Statement Dec-05
    Sales 2004.016
    Cost of Goods Sold 1446.733
    Gross Profit 557.283
    Selling and Ad
    Expenses 361.402
    Deprciation 56.87
    Operating Income
    (EBIT) 139.011
    Interest expense 34.482
    Other Expense 14.124
    EBT 90.405
    Taxes 2 ...

    Solution Summary

    This explains the computation of Average Collection Period; Inventory Turnover; Total Asset Turnover

    $2.49

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