Computation of Financial Ratios
Schlofman Company has the following assets.
|
Cash |
$ 20,000 |
|
Accounts receivable |
60,000 |
|
Inventory |
105,000 |
|
Property, plant, and equipment |
220000 |
|
Total assets |
$405,000 |
Companies in Schlofman’s industry typically have the following asset mix: cash, 7%; accounts receivable, 15%; inventory, 18%; property, plant, and equipment, 60%. Compared to other companies in its industry, Schlofman has too much of one asset. Which one? Show your computations.