Expert Answers

1. (TCO 5) Szabo Company computed the following data for 2010:
Days’ sales in receivables: 38.7 days
Accounts receivable turnover: 9.6 times
Accounts receivable turnover in days: 35.3 days
Days’ sales in inventory: 68.5 days
Merchandise inventory turnover: 5.9 times
Inventory turnover in days: 58.9 days
The estimated operating cycle for 2003 is: (Points : 20)

2.(TCO 4) The following financial statement data are taken from Xeron Company’s 2010 annual report:
(in millions)
Current assets $12.6
Investments 9.4
Intangibles 6.8
Tangible assets (net) 58.1
Current liabilities 6.4
Long-term debt 39.7
Stockholders’ equity 40.8
Compute the debt to tangible net worth ratio. (Points : 20)

3. (TCO 6) Francis Company had operating expenses of $20,000 and depreciation expenses of $4,000. What was the cash paid for operating expenses? (Points : 20)

4. Smith reported the following for 2006.

Beginning market price $20.00
Average market price 24.00
Ending market price 26.00
Earnings per share:
Basic 1.80
Diluted 1.60
Cash dividends per share 1.00

The price earnings ratio and dividend payout were: (Points : 20)