FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781618533111
Author: DYCKMAN
Publisher: Cambridge Business Publishers
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Question
Chapter 8, Problem 30E
a.
To determine
Compute the receivables, inventory, and PPE turnover ratios for both 2018 and 2017.
b.
To determine
Indicate the changes that are evident in the turnover rates of 3M for these years, Discuss the ways in which the company can improve its turnover within each of these three areas.
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Students have asked these similar questions
GIVE THE FORMULAS FOR THE FOLLOWING EFFICIENCY RATIOS OF
NESTLE. THANK YOU
Ratio Analysis
Efficiency
Asset turnover
Inventory turnover
Receivables turnover
Summary of Financial Ratios of Nestle
2020
2019
Average collection period (days)
0.68
4.254
7.849
46.519
0.724
4.993
7.867
46.323
Industry Average
449 days
68 days
34 days
Selected ratios of Company X are shown below:
Inventory turnover
Days' sales uncollected
Days' purchases in accounts payable
Total asset turnover
Equity ratio
Times interest earned
2021
5.3
32.4
21.0
2.6
0.8
N.A.
2020
7.1
18.3
20.0
2.5
0.8
N.A.
Using the financial ratios provided, analyse the performance of Company X in 2021
compared to the previous year.
What changes are evident in the turnover rates of 3M for these years? Discuss ways in which a company such as 3M can improve its turnover within each of these three areas (receivable, inventory, and PPE turnover)?
Chapter 8 Solutions
FINANCIAL ACCOUNTING
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