Trentham Products currently has $2,000,000 in accounts recievable, and its days sales in recievables is 31 days. If accounts recievable comprises half of the firms current assets and trentham has $6,000,000 in net fixed assets, what is trenthams total asset turnover ratio?
1.825 times
2.086 times
2.212 times
2.355 times
1.872 times
Trentham's management is concerned that the firm's credit policy is too lax and wants it tightended up. The industry average day's sales in recievables is 25 days. Suppose Trentham enforces a stronger credit policy and lowers its days sales in recievables to 25 days. Management expects to lose some credit sales because of the stronger policy, and thinks annual sales will decline by 5%. By how much will Trenthams accounts Recievable decrease as a result of this new policy?
$782,051
467,742
602,941
515,625
812,500
Suppose you are conducting ratio analysis for several different firms. Two such companies are iToys Inc.and Garland Financial Services. For which company will the inventory turnover ratio mean more?
iToys Inc.
Garland Financial Services
Further in your analysis, you come across two manufacturing firms that have nearly the same level of sales, the same size facilities, and the same number of employees. The only real difference you can see is that Firm A purchased all its major fixed assets many years aago, while firm B has purchased all its fixed assets very recently. If inflation has remained relatively constant, which firm is likely to have the higher fixed asset turnover ratio?
Firm A?
Firm B?