Concept explainers
Inventory Turnover: It is a part of
Return on Common
Accounts Receivable Turnover: A measure of ability to collect account receivables, account receivable turnover reports the net credit sales as the times of average account receivables. It reflects the efficiency in account receivable collection.
Return on Assets: It is a measure to evaluate the efficiency of company’s assets. It reports the profit earned as the percentage of total assets used in the business. A company’s rate of return on total assets reflects its ability to optimize the use of total assets.
To compute: (a). The cost of goods sold (b).net sales (credit) (c).net income (d) total assets of Company L.
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ACCOUNTING PRINCIPLES
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