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pexels-kulbir-11079217
pexels-kulbir-11079217
PART 1 (20 points) The Smart Catering Company has credit sales of $750 000. Giv
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PART 1 (20 points) The Smart Catering Company has credit sales of $750 000. Giv
PART 1 (20 points) The Smart Catering Company has credit sales of $750 000. Given the following ratios, the company accountant needs to make a the balance sheet: Total asset turnover: 2.5 times Cash to total assets: 2% Account receivable turnover: 10 times Inventory turnover: 15 times Current ratio: 2 times Debt to total assets:45%. Make a proper balance sheet based on the information above, for each item make sure you explain how you arrived to the answer. PART 2 (20 points) The following informations are provided for the following Catering company Sales $3 millions Cash $150 000 Inventory $850 000 Current liabilities $700 000 Asset turnover 1.24 times Current ratio 2.5 times Debt to asset ratio 40% Receivable turnover 6 times Current assets are composed of cash, marketable securities, account receivable and inventory. Calculate the following balance sheet items. 1) Account receivable 2) Marketable securities 3) Fixed assets 4) Long term debt 5) Working capital 6) Quick ratio Explain for each how you arrived to your answer PART 3 (20 points) The following information are provided for Warton Catering : Sales are $20 million (all credit) Sales to total asset 2.0 times Debt to total asset 30% Current ratio 3 times Inventory turnover 5 times Average collection period 18 days Fixed asset turnover. Make a balance sheet and explain how you arrived to your answer ? PART 4 (20 points) Based on the balance sheet in part 1 and part 3 and the ratios: Compare both companies performance and make comments PART 5 (20 points) By looking at each ratios mentioned in part 1 and part 3 explain how each one would be affected by inflation.

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