Reference no: EM132524131
The following are some items for Walmart Company at December 31, 2018:
Accounts Payable 14,500
Sales Revenue 29,000
Accounts Receivable 2,100
Marketable Securities 9,000
Building 51,000
Vehicle 31,000
Cash 25,000
Note Payable 9,700
Supplies expenses 2,600
Salaries Expenses 10,200
Salaries Payable 12,800
Capital Stock 45,000
Total equity 60,000
Note Receivable 8,300
Utilities expenses 3,200
Tax 2,000
Inventories 5,000
COGS 20,000
Retained Earnings ???
Service revenues 5,000
Problem a: Calculate the following ratios:
Working Capital, Current Ratio, Quick Ratio, Accounts Receivable Turnover Ratio, Inventory Turnover Ratio, and Return on Equity.
1- On average, how many days of sales were in Accounts Receivable during the year? On average, how many days of sales were in Inventory during the year?
2- Is it better for the company to increase the accounts receivable turnover rate or not? What about inventories turnover?
3- Using the previous ratio, what will be situation of liquidity of this company?
4- Calculate two ratios that can used to measure the firm's ability to meet its long-term obligations; and interpret your answer?
Problem b: What are the advantages & limitation of Ratio Analysis? Use your own words.