Question

In: Accounting

Selected are recent balance sheet and income statement information from Coach Inc. and Ann Taylor follows:...

Selected are recent balance sheet and income statement information from Coach Inc. and Ann Taylor follows:

($ millions)

Ann Taylor

Coach Inc

Sales

$2,212

$4,763

Cost of goods sold

1,004

1,297

Average accounts receivable

19

159

Average inventory

204

463

Average total assets

907

2,870

Required

  1. For each company, compute the following:
  1. Accounts receivable turnover
  2. Inventory turnover
  3. Asset turnover
  1. Interpret and comment on any differences you observe between the turnover rates for these two companies, i.e. for each ratio, which company has the better result.

Solutions

Expert Solution

B) from the above details we can observe that,

In case of account Receivable Turnover coach is better & in case of Inventory Turnover Ann Taylor is better in Inventory management and in case of asset Turnover ann Taylor is better that asset can generate sales by 2.44 times.

Overall Ann taylor is better.

If you have any doubts please comment on the answer.

ekkarill92 answered 8 months ago
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