Question Details

Which company appears to have the best liquidity position 



Figure 16-5.
The following information that was obtained from the 2014 and 2013 financial statements of James Company, Norris Corporation, and Zorro Company:

(In millions)		James 	Norris	Zorro
Accounts receivable	12/31/14	$  33,000	$  22,000	$  41,500
	12/31/13	30,000	12,800	42,600
				
Inventory	12/31/14	$   2,600	$  12,600	$  54,200
	12/31/13	23,900	32,800	44,000
				
Net sales (Credit)	2014	$620,000	$320,000	$510,000
	2013	610,000	310,000	760,000
				
Cost of goods sold	2014	$211,000	$406,000	$311,000
	2013	156,000	200,000	310,000

1.	Refer to Figure 16-5. Compare the three companies and answer the following:

A.	Compute the accounts receivable turnover ratio for each company for 2014.
B.	Which company appears to have the best liquidity position based solely on the accounts receivable turnover? Explain.


2.	Refer to Figure 16-5. Compare the three companies and answer the following:

A.	Compute the number of days inventory is held before being sold for each company for 2014.
B.	Which company appears to have the best liquidity position based solely on the inventory analysis? Explain.





Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help