Which of the
following statements is true with regard to Ace Retailers?
-The negative cash conversion cycle means that Ace Retailers is paying out cash sooner than they collect from their customers.
-The low average collection period implies that Ace takes too long to collect on accounts receivable.
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-The average collection period and the days inventory held ratios are too high for a retailer.
-The company is able to collect cash faster than they are paying their suppliers, which is why their cash conversion cycle is negative.
16. All of the following statements are true with regard to Ace Retailers except:
-Overall, Ace Retailers has good cash management and short term liquidity does not appear to be a concern for the firm.-
-Current assets are greater than current liabilities in both 2016 and 2015.
-The decline in the cash flow from operations amount from 2015 to 2016 explains the negative cash conversion cycle.
-The firm has enough cash flow to cover current liabilities
17. Which of the following statements is true with regard to the asset turnover ratios of Ace Retailers?
-Total asset turnover has decreased due to less efficient use of fixed assets.
-Fixed asset turnover has gotten worse while total asset turnover is better in 2016 compared to 2015.
-Ace Retailers has increased sales relative to their investment in fixed assets or decreased their investments in fixed assets relative to sales.
-Total asset turnover has declined in 2016 due to the change in revenues.