inventory turnover, Finance Basics

Assignment Help:
Ask question #MinimQuestion

You are the financial accountant of Donald Bhd, a manufacturer and wholesaler of soft drinks. Donald Bhd is in direct competition with Fizz Bhd and Pop Bhd.

The finance director has informed you that the board of directors are considering purchasing an interest in one of their two competitors in order to increase market share. This decision will be based on forward-looking market and management information. However, the directors seek to use data from recent corporate reports to construct the necessary estimates and forecasts leading to their decision.

The finance director has provided you with the following table of statistics calculated from the most recent financial statements of both competitors.

Fizz Bhd Pop Bhd
Gross profit margin 40% 40%
Net profit margin 15% 10%
Inventories turnover 8 times 4 times
Receivable days 63 days 40 days
Payable days 65 days 65 days
Current ratio 1.25:1 1.75:1
Liquid ratio 0.9:1 1:1
Asset turnover 1.5 times 2 times

Required:

Using the above information, prepare a report for the board of directors’ comparing the results and the financial situation of the two competitors
um 100 words accepted#

Related Discussions:- inventory turnover

Analysis of price and financial leverage , The Bayview Investment Partners...

The Bayview Investment Partners owns an office building near Shoal Creek and Anderson lane in suburban Dallas. The building is ten years old. Bayview is willing to sell the propert

What are the tasks of a financial system, What are the tasks of a financial...

What are the tasks of a financial system? Three Tasks of a Financial System are as follows: 1. Decreasing transaction costs 2. Decreasing financial risk 3. Giving liqu

Determine the rate of return, 1. A stock pays no dividend and is expected t...

1. A stock pays no dividend and is expected to be sold for $50 after 4 years. If the investor's RRR is 12%, at what price is he/she willing to buy it? 2. ABC company has its ROE

Preference shares, what makes a preference shares a hybrid?

what makes a preference shares a hybrid?

Accounting, iwant to learn how todo the maths for accounting

iwant to learn how todo the maths for accounting

Motgage Broker Assgnment, ollowing a personal introduction, and before you ...

ollowing a personal introduction, and before you begin gathering information about the clients’ existing financial situation or needs, there are certain disclosures you are require

Risk structure of interest rates, risk structure of interest rates 1. Defa...

risk structure of interest rates 1. Default risk 2. Liquidity 3. Income tax consideration 4. Expectations theory

Mgmt640, Monroe, Inc., is evaluating a project. The company uses a 13.8 per...

Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project?

Managing financial resources, Two friends, Alan & Tim just graduated from t...

Two friends, Alan & Tim just graduated from the college. They plan to start their own business, of selling health foods for office workers. They have identified a commercial comple

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd