G Use the following information for questions 4-6. The 2016 Income Statement of Illini Company reported net sales of $8 million, cost of goods sold of $4.8 million, and net income of $800,000. The following table shows the company's comparative Balance Sheets for 2016 and 2015: 2016 ($ in 000s) 2015 ($ in 000s) Assets Cash $ 300 $ 380 Accounts receivable 700 500 Inventory 900 700 Property, plant, and equipment (net) 2,400 2,120 Total assets $4,300 $3,700 Liabilities and Shareholders' Equity Current liabilities $ 960 $ 830 Bonds payable 1,200 1,200 Paid-in capital 1,000 1,000 Retained earnings 1,140 670 Total liabilities and shareholders' equity $4,300 $3,700 The industry averages for Illini’s line of business are: Inventory turnover: 5 times Average collection period: 25 days Asset turnover: 1.8 times In the following questions, assess Illini's asset management relative to its industry by calculating the key three activity ratios above.

Account receivable turnover ratio = 13.3

ROE= 4.19

Explanation:

Inventory turnover = 5 times

Cost of goods sold = $4.8 million

we know that:

Inventory turnover ratio = Cost of goods sold / Average inventory

  5 =  4.5 / Average inventory

 Average inventory = 4.5 / 5 = $ 0.9 million.

Account receivable (2016)= 700,000

Account receivable (2015)=500,000

we know that:

Average account receivable = [(open) A/c receivables + (end) a/c receivable ] / 2

              =  (500,000+700,000) /2

  Average account receivable = $ 600,000  

we know that: Account receivable turnover ratio= net credit sales / average account receivable.

                           =  8000000/600000

  Account receiable turnover ratio        = 13.3.

Asset turnover ratio= 1.8 times

sales = $ 8000000

we know that total asset turnover ratio= total sales / Total asset

                     1.8 = 8000000/Total assets

             Total assets = 8000000/1.8

            Total assets      =$4,444,444

Return on equity = Net income /Average shareholder equity

Average shareholder equity =[(open) equity + (end) equity)] / 2

  Paid-up capital + retained earning (2016)=1000+1140=2140,000

  Paid-up capital + retained earning (2015)=1000+670= 1670,000

Average shareholder equity =( 2140,000+1670,000) / 2

                                               =$1905,000

Return on equity   =  8000000/1905000 = 4.19

steering wheels are always situated on the left side of the car.

always drive on the right side of the road.

white lines separate lanes of traffic traveling the same direction.

hashed or broken lines means you may change lanes when it is safe.

solid white lines mean stay in your lane.

yellow lines separate traffic moving in opposing directions.

hashed or broken yellow lines mean you can carefully pass, paying attention to oncoming traffic.

never cross a solid yellow line (or double yellow line).

when turning left at an intersection, pass in front of any cars that are turning left from the opposing direction (do not try to pass behind them).

use the left lane to pass other cars traveling your direction.

do not pass in the right lane unless absolutely necessary.

if you are driving in the far left hand lane and someone would like to pass you, move over to the right lane when it is safe to do so and allow them to pass.

you must always yield to pedestrians.

come to a complete stop whenever you see pedestrians trying to cross the street.

never pass a school bus if it has flashing red lights. wait until the lights have stopped.

be aware of bicyclists. often they share the road with cars and are supposed to also follow general traffic laws.

be particularly careful about driving in cities with bike lanes -- always check before turning that a bike is not coming.

it is mandatory to pull over or stop at an intersection to allow an emergency vehicle to pass you if you see one traveling with lights flashing and/or a siren running.

do not overuse your car horn. horns are used almost exclusively for emergency situations or for when you feel unsafe.

explanation:

employers prefer to hire ingenious, resourceful people because ingenious people may be more liable to engage in unethical deportment as they can cerebrate outside of the box