8 days sales outstanding 32 days fixed assets

  • No School
  • AA 1
  • 4
  • 100% (1) 1 out of 1 people found this document helpful

This preview shows page 3 - 4 out of 4 pages.

turnover 5.8% Days sales outstanding 32 days Fixed assets turnover 13.0 2.6% Total assets turnover 9.1% Return on assets 18.2% Return on equity 50.0% Debt ratio 3.5% Profit margin on sales 6.0% P/E ratio Industry average ratios have been constant for the past four years. Based on year-end balance sheet figures. CFING . What do you think would happen to Cary's ratios if the company initiated cost-cutting measures that allowed it to hold lower levels of inventory and substantially decrease the cost of goods sold? To answer this question, suppose inventories drop to S700,000 and the inventory turnover is 5.0 (HINT: In this case, cost of goods sold will change.). . Suppose Cary Corporation is considering installing a new computer system that would provide tighter control of inventories, accounts receivable, and accounts payable. If the new system is installed, the following data are projected (rather than the data given carlier) for the indicated balance sheet and income statement accounts: Accounts receivable $ 395,000 Inventories $ 700,000 Other fixed assets $ 150,000 Accounts and notes payable $ 275,000 Accruals $ 120,000 Cost of goods sold $3,450,000 Administrative and selling expenses $ 248,775 PE ratio 6.0 How do these changes affect
Image of page 3
Image of page 4

You've reached the end of your free preview.

Want to read all 4 pages?

  • Fall '19
  • Balance Sheet, Financial Ratio, Generally Accepted Accounting Principles, CARY, Cary Corporation

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors