Use the information below to answer the requirements.
| Current Year | Prior Year | |
|---|---|---|
| Work in process inventory | $180,000 | $195,000 |
| Cost of goods sold | 2,137,000 | 2,110,000 |
A) Compute days’ sales in work-in-process inventory for the current year.
B) Compute days’ sales in work-in-process inventory for the prior year.
C) Did days’ sales in work-in-process inventory increase or decrease from the prior year?
A manufacturer reports the following for two of its divisions for a recent month.
| Beverage Division | Cheese Division | |
|---|---|---|
| Average assets | $7,800 | $14,200 |
| Sales | 3,420 | 5,560 |
| Income | 852 | 1,220 |
For each division, compute
A) return on investment
B) profit margin
C) investment turnover
A manufacturer reports the data below.
Accounts payable – $10,549
Accounts receivable – 19,374
Inventory – 6,355
Net sales – 234,507
Cost of goods sold – 139,100
A) Compute the number of days in the cash conversion cycle.
B) Is the company more efficient at managing cash than its competitor who has a cash conversion cycle of 14 days?
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