Condensed financial data are presented below for the Phoenix Corporation: 2019 2018
A ccounts receivable 267,500 $ 230,000
Inventory 312,500 257,500
Total current assets 670,000 565,000
Intangible assets 50,000 60,000
Total assets 825,000 695,000
Current liabilities 252,500 200,000
Long-term liabilities 77,500 75,000
Sales 1,640,000
Cost of goods sold 982,500
Interest expense 10,000
Income tax expense 77,500
Net income 127,500
Cash flow from operations 71,000
Cash flow from investing activities (6,000)
Cash flow from financing activities (62,500)
Tax rate 30%
1. The inventory turnover for 2019 is (rounded):.
a. 20 times.
b. 6.4 times
c. 6.6 times
d. 7.1 times
2. In a common-size balance sheet, all items are expressed as a percentage of:.
a. total assets
b. total liabilities.
c. total equity
d. total sales.
3. Solvency refers to:.
a. short-term ability to fund the company's operating needs.
b. long-term ability to generate cosh to for plant capacity needs and to fuel growth.
c. long-term ability to generate sufficient cash to satisfy plant capacity needs, fuel growth, and to repay debt when due.
d. the company's ability to generate sufficient cash to repay debt when due.