C.
6.7 times.
D.
8.0 times.
Question: 91
All of the following financial indicators are measures of liquidity and activity
except
the
A.
Merchandise inventory turnover.
B.
Average collection period in days.
C.
Accounts receivable turnover.
D.
Times interest earned ratio.
Fact Pattern:
The information below pertains to Devlin Company.
Statement of Financial Position as of May 31
(in thousands)
Year 2
Year 1
Assets
Current assets
Cash
$ 45
$ 38
Trading securities
30
20
Accounts receivable (net)
68
48
Inventory
90
80
Prepaid expenses
22
30
Total current assets
$255
$216
Investments, at equity
38
30
Property, plant, and equipment (net)
375
400
Intangible assets (net)
80
45
Total assets
$748
$691
Liabilities
Current liabilities
Accounts payable
$
70
$
42
Accrued expenses
5
4
Notes payable
35
18
Income Statement for the year ended May 31
(in thousands)
Year 2
Year 1
Net sales
$480
$460
Costs and expenses
Costs of goods sold
330
315
Selling, general, and
administrative
52
51
Interest expense
8
9
Income before taxes
$
90
$
85
Income taxes
36
34
Net income
$ 54
$ 51
