Assets Utilization

1. Write a one-paragraph description of trends that appear to have taken place over the three-year time period

(Refer to question 1 above for 2013 and 2014 data and question 3 above for the adjusted net income numbers

for 2015).

2. Write a one-paragraph analysis of the company’s profitability ratios compared to the industry ratios (Figure 3

above) using the revised ratios for 2015 from question 3 above. Include asset turnover and debt to total assets

as supplemental material in your analysis.

3. Calculate the Asset Utilization ratios for 2015 using the formulas provided in section “B. Asset Utilization Ratios”

within Chapter 3:

1. Receivable turnover (Note: For the Receivables turnover ratio, only half the sales are on credit

terms.)

2. Inventory turnover

3. Fixed Asset turnover

4. Write a brief one-paragraph description of any trends that appear to have taken place. Compare Harrod’s sales

to total assets ratio to the industry in your description.

5. Write a one-paragraph conclusion that provides analysis of your answers to questions 4 and 5 above.

a. Include your opinion on whether or not Becky Harrod has a legitimate complaint about being charged

2ó percent, instead of 1 percent over prime.

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