Calculate Campbell’s inventory turnover ratio and accounts receivable turnover ratio for the year ended 2017. Further, assume that in Campbell’s industry, the industry average inventory turnover ratio is 12 and the industry average receivables turnover ratio is 14.
Which of the following statements are true:
Campbell’s inventory turnover ratio and accounts receivable turnover ratios are better than average for Campbell’s industry.
Campbell’s inventory turnover ratio and accounts receivable turnover ratios are worse than average for Campbell’s industry.
Campbell’s inventory turnover ratio is better but the accounts receivable turnover ratio is worse than average for Campbell’s industry.
Campbell’s inventory turnover ratio is worse and accounts receivable turnover ratio is better than average for Campbell’s industry.
$25,000
$12,000
$24,000
Debt/equity ratio = Average total liabilities / Average total shareholders’ equity
Justin Company has total assets, liabilities, and shareholders' equity of $38,000, $17,000, and $21,000, respectively, at the beginning of 2017. At the end of 2017, total assets, liabilities, and shareholders' equity were reported at $32,000, $13,000, and $19,000, respectively. How much additional debt can Justin Company incur and still have its debt/equity ratio remain less than or equal to 1.00?
$10,000
$25,000
$12,000
$24,000