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    Turnover Ratios

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    Jim Short's Company makes clothing for schools. Sales in 2007 were $4,000,000. Assets were as follows:

    Cash $100,000
    Accounts receivable $800,000
    Inventory $400,000
    Net plant and equipment $500,000
    Total Assets $1,800,000

    a) Compare the following:
    1. Accounting receivable turnover
    2. Inventory turnover
    3. Fixed asset turnover
    4. Total asset turnover

    b) In 2008, sales increased to $5,000,000 and the assets for that year were as follows:

    Cash $100,000
    Accounts receivable $900,000
    Inventory $975,000
    Net plant and equipment $500,000
    Total Assets $2,525,000

    Once again, compute the four ratios.

    c) Indicate if there is an improvement or decline in total asset turnover and based on the other ratio, indicate why this development has taken place.

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    https://brainmass.com/economics/economic-development/total-asset-turnover-ratios-202390

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    Jim Short's Company makes clothing for schools. Sales in 2007 were $4,000,000. Assets were as follows:

    Cash $100,000
    Accounts receivable $800,000
    Inventory $400,000
    Net plant and equipment $500,000
    Total Assets $1,800,000

    a) Compare the following:
    1. Accounting receivable turnover= Sales /Accounts receivable turnover

    =4000000/800000
    =5 ...

    Solution Summary

    This provides the steps to compute the turnover ratios. The accounts receivables are determined.

    $2.19

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