Rags to Riches Selected data from the financial statements are provided below:
$\begin{array}{ll}
& \underline{ 2015 } & \underline{ 2014 } \
\text { Accounts Receivable } &\$ 120,000 & \$ 76,000 \
\text { Inventory } &24,000 & 32,000 \
\text {Total Assets } &900,000 & 760,000 \
\text { Net Sales } &760,000 & 540,000 \
\text { Cost of Goods Sold } &320,000 & 420,000
\end{array}$
-Refer to Rags to Riches.Which of the following would be found through ratio analysis of the company's financial statements?
A)The accounts receivable turnover ratio is 7.76 in 2015.
B)Cost of goods sold increased $50,000 or 23.8% in 2015.
C)Accounts receivable increased $22,000 during 2015.
D)Total assets decreased 18.4% during 2015.

Question

Rags to Riches Selected data from the financial statements are provided below:
$\begin{array}{ll}
& \underline{ 2015 } &  \underline{ 2014 } \
 \text { Accounts Receivable } &\$ 120,000 & \$ 76,000 \
 \text { Inventory } &24,000 & 32,000 \
 \text {Total Assets  } &900,000 & 760,000 \
 \text { Net Sales } &760,000 & 540,000 \
 \text { Cost of Goods Sold } &320,000 & 420,000
\end{array}$ 
-Refer to Rags to Riches.Which of the following would be found through ratio analysis of the company's financial statements?
A)The accounts receivable turnover ratio is 7.76 in 2015.
B)Cost of goods sold increased $50,000 or 23.8% in 2015.
C)Accounts receivable increased $22,000 during 2015.
D)Total assets decreased 18.4% during 2015.

Quizplus · Accepted Answer

Ratio analysis involves calculating various ratios based on the financial data provided. The accounts receivable turnover ratio can be calculated by dividing net sales by accounts receivable. Using the data provided, the accounts receivable turnover ratio for 2015 is 7.76 ($760,000 / $120,000). The other options do not involve ratio analysis and cannot be calculated using the given data.

Rags to Riches Selected Data from the Financial Statements Are