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Week+4+Individual+Template - Scott Ward Reeds Clothier Case...

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Scott Ward “Reed’s Clothier” Case Study and Questions There are 2 tabs within this file. Please be sure you work on both tabs. Formulate answers to questions 1, 2, 3, 4, 5, 6, 7, and 8. For question 1, you should calculate all the ratios listed in Exhibit 4 of the case Reed's Industry Liquidity Ratios Current Ratio 2 2.7 Quick Ratios 0.9 1.6 Receivables Turnover 4.9 7.7 Average Collection Turnover 74.1 47.4 Efficiency Ratios Total Asset Turnover 1.3 1.9 Inventory Turnover 2.9 7 Payable Turnover 7 15.1 Profitability Ratios Gross Profit Margin 29.8 33 Net Profit Margin 4.2 7.8 Return on Common Equity 16 25.9 INSTRUCTIONS: Input cells are gray, once you enter #'s in gray cells everything else calculates. in 0000's Net Sales 1938 Cost of Goods 1298.46 Gross Profit 639.54 352.716 32 Interest expense 23.256 Income before taxes 246.126 Prov for Income Taxes 95 Net Income 152 1. Calculate all the ratios and compare Reed’s results with industry averages. What do these ratios indicate ?(Formatted to reflect Exhibit 4.) below. The ratios indicated the Reed's is in a poor position compared to the industry's
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This note was uploaded on 03/01/2012 for the course ACC all taught by Professor All during the Spring '12 term at University of Phoenix.

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Week+4+Individual+Template - Scott Ward Reeds Clothier Case...

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