Refer the following table Airspace Technologies Inc Comparative Balance Sheet In
ID: 2336845 • Letter: R
Question
Refer the following table Airspace Technologies Inc Comparative Balance Sheet Information November 30 (millions of S) 2017 $ 79 128 210 90 900 114 102 35 138 258 616 2016 2015 Cash Accounts receivable (net) Inventory Prepaid rent Plant and equipment (net) Accounts payable Accrued liabilities Income tax payable Preferred shares Common shares Retained earnings 30 42 246 858 138 206 54 71 23 834 61 95 30 138 258 614 138 258 572 Airspace Technologies Inc. Income Statement For Year Ended November 30, 2017 (millions of S) 2017 2016 $1,344 Net sales Cost of goods sold $1,560 546 474 S 870 $ 84 $1,014 Gross profit Operating expenses Depreciation expense Other expenses $ 84 516 360 Total operating expenses 600 Profit from operations Interest expense Income tax expense $ 414 53 60 $ 426 43 62 Profit $ 301 $ 321Explanation / Answer
Note: 365 days in the year are used.
2017
2016
Current ratio
2.02 : 1
1.71 : 1
Quick ratio
0.82:1
0.41:1
Accounts receivable turnover
16.08 times
22.40 times
Days’ sales uncollected
22.70 days
16.29 days
Inventory turnover
2.39 times
2.10 times
Days’ sales in inventory
152.72 days
173.81 days
Total asset turnover
1.17 times
1.10 times
Accounts payable turnover
5.51 times
7.79 times
Ratios
Favourable / Unfavourable
Current ratio
Favourable
Quick ratio
Favourable
Accounts receivable turnover
Unfavourable
Days’ sales uncollected
Unfavourable
Inventory turnover
Favourable
Days’ sales in inventory
Favourable
Total asset turnover
Favourable
Accounts payable turnover
Unfavourable
Explanation;
2017
2016
Current ratio
($507 / $251) = 2.02:1
($396 / $232) = 1.71:1
Quick ratio
($207 / $251) = 0.82:1
($96 / $232) = 0.41:1
Accounts receivable turnover
($1560 / $97) = 16.08 times
($1344 / $60) = 22.40 times
Days’ sales uncollected
365 / 16.08 = 22.70 days
365 / 22.40 = 16.29 days
Inventory turnover
($546 / $228) = 2.39 times
($474 / $226) = 2.10 times
Days’ sales in inventory
365 / 2.39 = 152.72 days
365 / 2.10 = 173.81 days
Total asset turnover
($1560 / $1330.50) = 1.17 times
($1344 / $1216) = 1.10 times
Accounts payable turnover
($510 / $92.50) = 5.51 times
($514 / $66) = 7.79 times
Purchases for 2017 will be;
Cost of goods sold = beginning inventory + Purchases – Ending inventory
$546 = $246 + Purchases – $210
Purchases = $510
Purchases for 2016 will be;
Cost of goods sold = beginning inventory + Purchases – Ending inventory
$474 = $206 + Purchases – $246
Purchases = $514
2017
2016
Current ratio
2.02 : 1
1.71 : 1
Quick ratio
0.82:1
0.41:1
Accounts receivable turnover
16.08 times
22.40 times
Days’ sales uncollected
22.70 days
16.29 days
Inventory turnover
2.39 times
2.10 times
Days’ sales in inventory
152.72 days
173.81 days
Total asset turnover
1.17 times
1.10 times
Accounts payable turnover
5.51 times
7.79 times
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.