Question: 1. Handi Mart, a retail store, has an accounts receivable turnover of 4.5 times. The industry average is 12.5 times. Does Handi Mart have a collection problem with its receivables?
2. Which ratios should be used to help answer each of these questions?
(a) How efficient is a company in using its assets to produce sales?
(b) How near to sale is the inventory on hand?
(c) How many dollars of net income were earned for each dollar invested by the owners?
(d) How able is a company to meet interest charges as they fall due?