Over the past year, Stop-n’-Shop has realized an increase in its current ratio and a drop in its total assets turnover ratio. However, the firm’s sales revenues, quick ratio, and fixed assets turnover ratio have remained constant. What might explain these changes?
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Over the past year, Stop-n’-Shop has realized an increase in its
total assets turnover ratio. However, the firm’s sales revenues, quick ratio, and fixed assets
turnover ratio have remained constant. What might explain these changes?
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- Over the past year, M.D. Ryngaert & Co. has realized an increase in its current ration and a drop in its total assets turnover ratio. However, the company’s sales, quick ration, and fixed assets turnover ratio have remained constant. What explains these changes?Data on Shick Inc. for last year are shown below, along with the days sales outstanding of the firms against which it benchmarks. The firm's new CFO believes that the company could reduce its receivables enough to reduce its DSO to the benchmarks' average. If this were done, by how much would receivables decline? Use a 365 day year. Do not round yourData on Shick Inc. for last year are shown below, along with the days sales outstanding of the firms against which it benchmarks. The firm's new CFO believes that the company could reduce its receivables enough to reduce its DSO to the benchmarks' average. If this were done, by how much would receivables decline? Use a 365-day year. Do not round your intermediate calculations. Sales $103, 000 Accounts receivable $16,000 Days Sales Outstanding (DSO) 56.699 Benchmarks' Days Sales Outstanding (DSO) 19.000 a. $9,805 b. $11,471 c. $10, 638 d. $4,529Over the past year, M.D. Ryngaert & Co. had an increase in its current ratio and a declinein its total assets turnover ratio. However, the company’s sales, cash and equivalents, DSO,and fixed assets turnover ratio remained constant. What balance sheet accounts must havechanged to produce the indicated changes?
- Which of the following statements is TRUE? When EBIT and total assets both increase by 25%, the basic earnings power will also increase O a. An increase in the quick ratio over time means that the company's liquidity position is improving. O b. approximately by 25%. A lower than the industry's average inventory turnover ratio means that the company turns over or sells O C. and replaces its inventory more times per year. A higher than industry average P/E ratio indicates the company's stock must be overvalued. d.The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Sales Expenses Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends Cash Accounts receivable Inventory Current assets Fixed assets Income Statement Total assets Assets $ 280,000 222,800 $ 57,200 7,800 $ 49,400 15,800 $ 33,600 $ 6,720 Balance Sheet (in $ millions) Liabilities and Stockholders' Equity $ 5,000 Accounts payable Accrued wages 86,000 77,000 Accrued taxes $ 168,000 88,000 Current liabilities Notes payable Long-term debt Common stock Retained…The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Sales Expenses Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends Current assets Income Statement Cash Accounts receivable Inventory Fixed assets Total assets Assets The firm $ 250,000 184,800 $ 65,200 8,600 $ 56,600 16,600 $ 40,000 $ 16,000 Balance Sheet (in $ millions) $ 221,000 Liabilities and Stockholders' Equity $ 4,000 Accounts payable Accrued wages 53,000 68,000 Accrued taxes $ 125,000 96,000 Current liabilities Notes payable Long-term debt…
- Net sales of the Premiere General Store have been increasing at a reasonable rate, but net income has been declining steadily as a percentage of these sales. What appears to be the problem?You observe that a firm's ROE has increased from the previous year, but both its profit margin and equity multiplier are below the previous year's levels. Which of the following statements is CORRECT? Its return on assets must be lower than the previous year. Its total assets turnover must be lower than the previous year. Its TIE ratio must be higher than the previous year. Its total assets turnover must be higher than the previous year.The following information pertains to Striker Corporation, together with its DSO/ACP of the firms against which it benchmarks. The firm's new CFO believes that the company could reduce its receivables enough to reduce its DSO/ACP to the benchmarks' average. If this were done, by how much would receivables decline? Use a 365-day year. Sales=P110,000; Accounts receivable= P16,000; Days sales outstanding (DSO/ACP)= 53.09; Benchmark days sales outstanding (DSO/ACP)=20.00 * P 8,078 O P 8,975 P 9,973 P10,970 P12,067
- Kiley Corporation had the following data for the most recent year (in millions). The new CFO believes (1) that an improved inventory management system could lower the average inventory by $4,000, (2) that improvements in the credit department could reduce receivables by $2,000, and (3) that the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Furthermore, she thinks that these changes would not affect either sales or the costs of goods sold. If these changes were made, by how many days would the cash conversion cycle be lowered? Original Revised Annual sales: unchanged $110,000 $110,000 Cost of goods sold: unchanged $80,000 $80,000 Average inventory: lowered by $4,000 $20,000 $16,000 Average receivables: lowered by $2,000 $16,000 $14,000 Average payables: increased by $2,000 $10,000 $12,000 Days in year 365 365Kiley Corporation had the following data for the most recent year (in millions). The new CFO believes (1) that an improved inventory management system could lower the average inventory by $4,000, (2) that improvements in the credit department could reduce receivables by $2,000, and (3) that the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Furthermore, she thinks that these changes would not affect either sales or the costs of goods sold. If these changes were made, by how many days would the cash conversion cycle be lowered? (Hint: Calculate the CCC for original and then for revised and take the difference. SHOW ALL WORK)Over the past year, Free Inc. had an increase in its current ratio and a decline in its total asset turnover ratio. However, its sales, cash, DSO and fixed asset turnover ratio remains constant. What the following statement is correct? Group of answer choices a)Total asset decreases, current asset decreases, and inventory increases b)Total asset increases, current asset increases, and inventory increases c)Total asset increases, current asset decreases, and inventory decreases d)Total asset decreases, current asset increases, inventory increases