Purchase Solution

Inventory-turnover ratio

Not what you're looking for?

Ask Custom Question

A) The balance sheet of the first chemical plant is given in the attached file.
If annual sale is $400,000, profit before income tax is $200,000, and the corporate tax rate is 50%, compute the return-on-total-assets ratio and the inventory-turnover ratio.

b) Define the inventory-turnover ratio and identify its two major inconsistencies.

c) Given the following information, construct the balance sheet of a private business and calculate its owners' equity:

Accounts receivable = $10,000
Bonds and debentures = $600,000
Equipment = $100,000
Cash = $10,000
Government bonds = $10,000
Land = $500,000
Inventories = $100,000
Sales = $100,000
Annual costs of production = $50,000
Office equipment = $50,000
Building = $500,000
Accrued taxes = $15,000
Accounts payable = $400,000

Note: If you use an Excel file for calculations, the rest of the problem should go in a MS Word file because it's hard reading words on Excel. Also, if the final results for calculations can be brought over to the Word file, that would be helpful. Please include the Excel file as well if you use it. Thanks!

Attachments
Purchase this Solution
Solution Summary

This explains the nventory-turnover ratio and its two major inconsistencies

Solution Preview

a) The balance sheet of the first chemical plant is given in the attached file.
If annual sale is $400,000, profit before income tax is $200,000, and the corporate tax rate is 50%, compute the return-on-total-assets ratio and the inventory-turnover ratio.

b) Define the ...

Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • Firm's Inventory Level and Inventory Turnover Ratio

    Solution: Inventory turnover ratio Sales Average inventory 1 Assuming that sales are $1000000 and inventory turnover ratio is 2 times: Average inventory = Sales Inventory turnover ratio

  • Calculating Accounting Ratios From a Balance Sheet

    turnover ratio = cost of goods sold/inventory Inventory turnover ratio = 1240000/141500 Inventory turnover ratio = 8.76 d) Days sales outstanding = receivables/(sales/365) Days sales outstanding = 256000/(1404500/365) Days sales outstanding =

  • Inventory turnover ratio for Neir Company

    Gross profit percentage decreased, Hello the answer is 4 Inventory turnover ratio = Cost of goods sold/Average inventory Inventory remains same but turnover ratio increased that means cost of goods sold which is the numerator in this case has

  • Explanation of the turnover rate

    Inventory turnover ratio: It is the ratio of annual sales to inventory; or equivalently, the fraction of a year that an average item remains in inventory.

  • Financial Statement Analysis - Current Ratio, Days in Inventory ratio, Inventory turnover ratio, Accounts Receivable Turnover ratio

    Calculate the days in inventory ratio for 2014. 3. Calculate the inventory turnover for 2014. 4. Calculate the Accounts Receivable Turnover for 2014. Solution is attached.

  • Inventory Turnover Ratio,

    A high inventory turnover ratio indicates that the company is going through inventory quickly, and a low inventory turnover ratio indicates that the company is taking a long time to turn their inventory into profits.

  • Financial ratios and a comparison of the ratios

    The ratio is average for the Spark at around 1.4:1 indicating average liquidity. Inventory turnover: The inventory turnover shows how rapidly the inventory is turning into receivables through sales.

  • Inventory, turnover ratio and gross profit ratio

    520035 Inventory, turnover ratio and gross profit ratio Using the following information, calculate inventory turnover ratio, the average days in inventory and the gross profit ratio for Howard Company for the year ended December 31, 2011 (Rounded to two

  • Collection Period, Inventory Turnover, Total Asset Turnover

    Inventory Turnover Ratio = Cost of Goods Sold/Inventory Cost of Goods sold= 1,446.733 Inventories= 141.35 Inventory Turnover Ratio = 10.24 times =1446.733/141.35 3 Total Asset Turnover Ratio

  • Financial Ratios

    170733 Financial Ratios: Inventory Turnover, Current Ratio, Etc. Solve for the following ratios. See attached file. Current ratio Acid test Receivables turnover Inventory turnover 2.

View More Related Solutions