Which company better manages its receivables, inventories, and payables? Common Size and Financial Statement Analysis (15%)Crocs designs, develops, and manufactures consumer products from specialty resins. The company'sprimary product line is Crocs-branded footwear for men, women, and children. It sells its productsthrough traditional retail channels, including specialty footwear stores. Deckers Outdoor designs andproduces sport sandals as well as sheepskin and sustainable footwear. The company's products aremarketed under three proprietary brands: Teva, Simple, and UGG. It sells its products through domesticretailers and global distributors and directly to consumers via the Internet.Financial ratios for each company follow. EBI denotes after-tax earnings before interest expense andexcluding nonoperating gains or losses.Selected Financial RatiosAnnual growth rateSalesOperating earnings (before taxes)AssetsProfitabilityEBI/Sales marginAsset turnoverReturn on Assets (ROA)Selected expense items (% of sales)Cost of goods soldSelling, general, and administrativeSelected asset utilization ratiosDays receivables outstandingDays inventory heldDays payables outstandingDequired2009(10.5%)(72.8%)(10.1%)(0.064)1.49(0.095)52.3%48.3%24.2127.837.1Crocs201022.3%(258.3%)34.1%0.0861.650.14246.2%43.3%26.5107.427.5201126.7%68.5%26.6%0.1131.610.18246.4%40.2%27.298.539.4200917.9%55.0%23.8%0.1431.500.21554.4%23.3%41.473.537.9Deckers Outdoor201023.1%37.4%35.0%0.1581.420.22549.8%25.4%35.277.138.8201137.6%14.4%41.7%0.1451.410.20450.7%28.6%41.198.939.3

1. High days payable outstanding is always favorable for company because High days payable…

Answered: Which company better manages its…

Business

Finance

Which company better manages its receivables, inventories, and payables?

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter10: Forecasting Financial Statement

Section: Chapter Questions

Problem 11PC

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