Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 32

Shown below are selected financial data for THIS Star, Inc., and THAT Star, Inc., at the end of the current year:

Assume that the year-end balances shown for accounts receivable and for inventory also represent the average balances of these items throughout the year.
Instructions
a.or each of the two companies, compute the following:
1.orking capital.
2.urrent ratio.
3.uick ratio.
4.umber of times inventory turned over during the year and the average number of days required to turn over inventory (round computation to the nearest day).
5.umber of times accounts receivable turned over during the year and the average number of days required to collect accounts receivable (round computation to the nearest day).
6.perating cycle.
b.rom the viewpoint of a short-term creditor, comment on the quality of each company's working capital.o which company would you prefer to sell $50,000 in merchandise on a 30-day open account
Holiday Greeting Cards is a local company organized late in July of 2014.he company's net income for each of its first six calendar quarters of operations is summarized below.Amounts are stated in thousands of dollars.)

Hal Holcomb reports the business and economic news for a local radio station.n the day that Holiday Greeting Cards released the above financial information, you heard Holcomb make the following statement during his broadcast: "Holiday Greeting Cards enjoyed a 350 percent increase in its profits for the fourth quarter, and profits for the entire year were up by over 100 percent."
Instructions
a.how the computations that Holcomb probably made in arriving at his statistics.Hint: Holcomb did not make his computations in the manner recommended in this chapter.is figures, however, can be developed from these financial data.)
b.o you believe that Holcomb's percentage changes present a realistic impression of Holiday Greeting Cards's rate of growth in 2015 Explain.
c.hat figure would you use to express the percentage change in Holiday's fourth-quarter profits in 2015 Explain why you would compute the change in this manner.