6 to 59 this means that 26 of the companys assets

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to 2017, from 2.6% to 5.9%. This means that 2.6% of the company’s assets were translated into net income in 2016, and 5.9% in 2017. Compared to the industry, these are amazing values, because in 2016 their competitor had a -2.6% ROA and in 2017, a -0.47 ROA, and their increase in 2017 is significant. Going forward, Barrick Gold Corporation should be cautious, because even though their assets are turning over well into net income at this point in time, mining is very risky. There could be a point in time when they experience a drastic decrease in raw materials for example, which would negatively affect their return on assets. Barrick Gold Corporation could combat this issue by continuing to limit operational expenses to increase net income, so that if there does come a point where the company experiences a lull in materials, they have a cushion to fall on, and they can limit their long-term debt.
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Turnover Ratios A/R Turnover 2016 2017 Barrick Gold Corp. =Credit sales/Av. A/R = 11 254/642.5 = 17.5 = 10 812/ 581.50 = 18.6 Industry = 7 693/279 = 27.6 = 7 324/290 = 25.3 Barrick Gold Corporation experienced a slight increase in their accounts receivable turnover ratio. This ratio measures the efficiency the company has in collecting funds from customers. Although they are below their competitor, they did experience an increase from 2016 to 2017, which is a good sign. In the future, Barrick Gold Corporation should continue to improve their efficiency to increase this ratio. Inventory Turnover Ratio 2016 2017 Barrick Gold Corp. =COGS/ average inventory = 7 633/ 2 486.50 = 3.1 = 7 497/ 2 478 = 3.0 Industry = 5 378/1 361.5 = 4 = 5 670/1 367.5 = 4.1 Barrick Gold Corporation’s inventory turnover ratio is not doing well. They are about 25% below their competitor, and while their competitor increased by 0.1, theirs decreased by the same amount. This ratio measures the efficiency at which the company is able to sell their inventory. In the future, the company should try to increase the rate at which they sell their product to keep up with the industry.
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Accounts Payable Turnover 2016 2017 Barrick Gold Corp. = COGS/ Av. A/P = 7 633/ 1 013 = 7.5 = 7 497/ 978 = 7.7 Industry = 5 378/ 317.5 =16.9 = 5 670/347.5 = 16.3 Barrick Gold Corporation’s accounts payable turnover is very low compared to their competitor (9.4 in 2016 and 8.6 in 2017), which means that they pay back their lenders slower.
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  • Spring '14
  • ElizabethMulig
  • Generally Accepted Accounting Principles, Barrick Gold, Barrick Gold Corp., Barrick gold corporation

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