Ratio Analysis 2 Flashcards Preview

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Flashcards in Ratio Analysis 2 Deck (3):
1

Explanation that would not effect A/R Turnover

Stolen Inventory

Cash Purchases

2

Explanation for higher A/R turnover in current year than in prior year

Factoring without recourse - removes A/R (sold to bank). Decreases Denominator

3

Explanation for lower A/R turnover in current year than in prior year

Fictitious credit sales have been recorded during the current year

Numerator and denominator increase by same amount.