1.The Robinson Company had a cost of goods sold of $1,000,000 in 2011 and $1,200,000in2012.
a. Calculate the inventory turnover for each year. Comment on your findings.
b. What would have been the amount of inventories in 2012 if the 2011 turnover ratio hadbeen maintained?
2.The Dayco Manufacturing Company had the following financial statement results forlastyear. Net sales were $1.2 million with net income of $90,000. Total assets at yearendamounted to $900,000.
a.Calculate Dayco's asset turnover ratio and its profit margin.
b.Show how the two ratios in Part (a) can be used to determine Dayco's rate of returnonassets.
c.Dayco operates industry average ratios are these: Return on assets: 11 percent;Assetturnover: 2.5 times; Net profit margin: 3.6 percent. Compare Dayco's performanceagainstthe industry averages.
3.This problem uses the financial statements for the Genatron Manufacturing Corporationforthe years 2012 and 2011 from Problem 6.
a.Calculate Genatron's dollar amount of net working capital in each year.
b.Calculate the current ratio and the acid-test ratio in each year.
c.Calculate the average collection period and the inventory-turnover ratio in each year.
d.What changes in the management of Genatron's current assets seem to haveoccurredbetween the two years?