From the data below, produce the following financial rates for Business “XYZ” and comment on your...

From the data below, produce the following financial rates for Business “XYZ” and comment on your current business situation.

Indicators:

to. Short-term solvency rate

b. Short-term debt rate

c. Inventory turnover rate

d. Average days of accounts receivable

The data for the company are:

Sales of the year: $ 250,000

Current assets: $ 220,000

Inventory: $ 50,000

Accounts receivable: $ 35,000

Current liabilities: $ 121,000

one

Solutions

Expert Solution

a) short term solvency rate- current assets/current liabilities

=$220000/121000 =1.82:1

this ratio shows the liquidity capacity of the company. The ideal rate for this is2:1, company's ratio is close to that so company is doing good to maintain solvency.

b) short term debt rate= current assets/current liabilities

=$220000/121000 =1.82:1

this ratio shows the liquidity capacity of the company. The ideal rate for this is2:1, company's ratio is close to that so company is doing good to maintain solvency.

c) Inventory turnover rate= sales/inventory

$250000/50000

5 times

it shows how the business manages sales of its inventory so a high ratio is good. the company is doing good in this parameter

d)Average days of accounts receivable= accounts recievable/365

35000/365 =$95.9

it shows that how long a companies take to recieve due amount, the company would want to keep it low so that they can reinvest it in the business

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Section B: Using the financial statements of XYZ Furnishings (below), comment on your interpretation of the...

Section B: Using the financial statements of XYZ Furnishings (below), comment on your interpretation of the financial health of the company. There is a maximum of 10 marks available for this section, four marks for your knowledge and understanding of the financial statements, four marks for your analysis and evaluation and 2 marks for your communication. Statement of Financial Position Assets Current Cash and equivalents 220 Trade receivables 8,420 Other receivables 10 Inventories 1,000 ST Investments 160 Non-Current Land and...

Use the financial data below from XYZ, Inc. to answer the questions below. Note that the...

Use the financial data below from XYZ, Inc. to answer the questions below. Note that the reported figures are in thousands of dollars: 2015 2014 Inventory $219,686.00 $241,154.00 Cost of Sales $54,661.00 $675,138.00 Net Income $31,185.00 $64,150.00 Tax Rate 37% 37% Note 1: If the first-in, first-out (FIFO) method of accounting for inventory had been used, inventory would have been approximately $26.9 million and $25.1 million higher than reported at 2015 and 2014, respectively. Required: What would the ending inventory...

Following data relates to XYZ Company. Based on below data prepare statement of cash flows. XYZ...

Following data relates to XYZ Company. Based on below data prepare statement of cash flows. XYZ Co. Ltd. Balance Sheet Assets Dec 31, 2009(Rs.) Dec 31, 2010(Rs.) Cash 135,000 190,000 Marketable Securities 120,000 130,000 A/R & N/R (net) 220,000 250,000 Inventories 300,000 360,000 Investment in stock of subsidiary company 335,000 240,000 Building & Equipment less allowance 800,000 1,040,000 Patents & Goodwill 140,000 36,000 Unamortized bond discount & Issuance cost 30,000 21,600 Total 2,080,000 2,267,600 Liabilities & Equity Dec 31, 2009(Rs.)...

It is the end of the financial year and your client is XYZ company. From the...

It is the end of the financial year and your client is XYZ company. From the following file note summary prepare an evaluation report. File note summary XYZ company. Financial potential $33,000 annually for the previous three years. Accumulated surplus $100,000. Statutory requirements: prepare and lodge BAS and IT. Compilation assurance. Reports provided by XYZ’s CEO. Preference to invest in government bonds. No contingency cash expected.

Find a real-world business example with data set (or example from a case study) and comment...

Find a real-world business example with data set (or example from a case study) and comment on the way hypothesis testing can be applied to answer a relevant business question. Identify the question(s) in your post and provide the data set at an attachment as a reference. please try to do it with R.

Presented below are financial data from ECI’s 2016 annual report. Your job is to take this...

Presented below are financial data from ECI’s 2016 annual report. Your job is to take this information and put together a cash flow statement. Balance Sheet Data 12/31/2016 12/31/2015 Cash 102,500 45,000 Net Accts Receivable 28,000 35,000 Inventories 270,000 200,000 Land 43,000 35,000 Plant Assets, Gross 274,000 260,000 Accumulated Depreciation 82,000 75,000 Accounts Payable 50,000 64,000 Wages Payable 6,000 1,000 ST Notes Payable 3,000 10,000 Dividends Payable 3,000 2,000 LT Bonds Payable 107,000 90,000 Common Stock 200,000 170,000 APIC-CS 207,000...

. Using the financial statement and data below answer the following questions: Financial Statement Data and...

. Using the financial statement and data below answer the following questions: Financial Statement Data and Stock Price Data for Flextronics (All data as of fiscal year end; $ in millions) Income Statement 2012 2013 2014 2015 2016 Revenue 404.3 363.8 424.6 510.7 604.1 Cost of Goods Sold -188.3 -173.8 -206.2 -246.8 -293.4 Gross profit 216 190 218.4 263.9 310.7 Sales and Marketing -66.7 -66.4 -82.8 -102.1 -120.8 Administration -60.6 -59.1 -59.4 -66.4 -78.5 Depreciation & Amortization -27.3 -27 -34.3...

1) The following data shows the yearly production data collected from firms in XYZ state and...

1) The following data shows the yearly production data collected from firms in XYZ state and ABC state. Yearly production in tons Number of Firms in XYZ Number of Firms in ABC 50 - 150 9 35 150 - 250 10 40 250 - 350 11 56 350 - 450 40 62 450 - 550 56 78 550 - 650 68 55 650 - 750 110 53 750 - 850 125 52 850 - 950 98 44 950 - 1050...

Financial accounting is designed to measure directly the value of a business enterprise. Comment.

. Choose a company from the following list and comment on their market position. Your answer...

. Choose a company from the following list and comment on their market position. Your answer must be in essay format. Address the following issues in your answer: • Choose any one of the following: Tesla, Amazon, Netflix, Zoom, Starbucks. You should get company information from either yahoo finance or WSJ markets. • The P/E • Is the stock expensive? Yes or No? Justify your answer • How many years will it take to recover the investment if earnings remain...

Subjects