I need the answer ASAP. Thanks.
Compare the collection periods for Solo and Fusion and suggest at least one explanation for the difference.
Which company is more efficient in collecting its accounts receivable? Explain.
Which company is more efficient in generating net sales given the total assets it employs? Assume an industry average of 1.0 for asset turnover.
Comment on which company appears stronger in its ability to pay interest obligations if income should decline. Assume an industry average of 20.
Teamwork Assignment 3
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Solo
Fusion
Current year
One year prior
Two years prior
Current year
One year prior
Two years prior
Receivable, net
$115,302.00
$89,294.00
$90,405.00
Receivable, net
$23,732.00
$29,227.00
$38,231.00
Total Assets
$1,228,024.00
$1,061,647.00
$763,653.00
Total Assets
$272,906.00
$246,084.00
$251,165.00
Net Sales
$2,659,949.00
$1,991,139.00
$1,565,887.00
Net Sales
$464,651.00
$450,728.00
$563,613.00
Net income (loss)
$227,575.00
$147,138.00
$101,017.00
Net income (loss)
$13,007.00
$1,875.00
$9,508.00
Income taxes
$119,051.00
$71,403.00
$50,157.00
Income taxes
$5,224.00
$777.00
-$6,247.00
Interest expense
$3,987.00
$2,680.00
$4,111.00
Interest expense
$11.00
$250.00
$1,015.00
5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 22 24 25 26 27
Turnover
Average days
Total asset turn
Interest earned
26.00
14
2.32
87.94
22.16
16
2.18
82.55
Turnover
Average days
Total asset turn
37.77
Interest earned
17.55
21
1.79
1658.36
13.36
27
1.81
5.39
14.52
