Hi I would like some help please. This first picture is the Word problem. The tw

Question

Hi I would like some help please. This first picture is the Word problem. The two pictures below are the questions. There are three questions. I need help showing my work. If I can have help I'll appreciate it. Thank you. You are given the balance sheet and sales information for Hoffimeister You are given the balance sheet and sales information for Hoffmeister Industries Industries: Accounts payable Long-term debt Cash 120,000 Accounts receivable Inventories Fixed assets Total assets $ Sales Common stock Retained earnings $600,000 Total liabilities and equity 195,000 Cost of Goods Sold (COGS) Debt ratio: 50% Total assets turnover: 1.5 Gross profit margin on sales (Sales-COGS)/Sales-25% .Quick ratio: 0.80 DSO (Days sales outstanding): 36.5 (based on 365 days) Inventory turnover ratio: 5.0

Explanation / Answer

11. Assets turnover ratio = sales /asset

1.5 = sales / 600000

Sales = $600000 × 1.5 = $900000

12. Days sales o/s =( acounts receivable /sales) × no.of days

36.5 = (accounts receivables / 900000) × 365

Accounts receivables =( 36.5 ×900000 )/365

= $90000

13. Inventory turnover = Cost of goods sold / avg inventory

5 = 900000( 1-.25) / inventory

Inventory = 675000/5

= $135000

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