The following information pertains to Bonita Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.AssetsCash and short-term investments$ 48000Accounts receivable (net)25000Inventory25000Property, plant and equipment 200000Total Assets$298000 Liabilities and Stockholders’ EquityCurrent liabilities$ 51000Long-term liabilities84000Stockholders’ equity—common 163000Total Liabilities and Stockholders’ Equity$298000 Income StatementSales (net)$ 115000Cost of goods sold 65000Gross profit50000Operating expenses 27000Net income$ 23000 Number of shares of common stock4000Market price of common stock$22Dividends per share0.40What is the inventory turnover for Bonita?3.55 times2.60 times 5.60 times0.38 times

Given, Inventory = $25,000 Cost of goods sold = $65,000

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 4PB

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The following information pertains to Bonita Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets
Cash and short-term investments	$ 48000
Accounts receivable (net)	25000
Inventory	25000
Property, plant and equipment	200000
Total Assets	$298000

Liabilities and Stockholders’ Equity
Current liabilities	$ 51000
Long-term liabilities	84000
Stockholders’ equity—common	163000
Total Liabilities and Stockholders’ Equity	$298000

Income Statement
Sales (net)	$ 115000
Cost of goods sold	65000
Gross profit	50000
Operating expenses	27000
Net income	$ 23000

Number of shares of common stock	4000
Market price of common stock	$22
Dividends per share	0.40

What is the inventory turnover for Bonita?

3.55 times

2.60 times

5.60 times

0.38 times

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