WEEK 4 EOC: Chapter 4 Quiz Question 3

QUESTIONS:

a. Compare Rachel’s Cash % with the chain’s %.  Is it higher or lower?  What might this mean?

b. Compare Rachel’s Inventories % with the chain’s %.  Is it higher or lower?  What might this mean?

c. Compare Rachel’s Accounts Payable % with the chain’s %.  Is it higher or lower?  What might this mean?

d. Compare Rachel’s Notes Payable % with the chain’s %.  Is it higher or lower?  What might this mean?

ANSWERS:

a. Rachel's is 4.5% and the chains is 6.70% This simply means that she is losing more money compared to the industries expectations. 

b. Rachel's inventories is 2.7% and the chain's is 1.30%. This means that she has way more inventory than needed

c. Rachel's is 11.3% and the chains is 10.50%. This means that she is going slightly over the amount that she owes from a lender. 

d. Rachel's is 2.5% and the chains is 1.10%. Again, like the accounts payable the notes payable fall under that same category. She owes just a little more than the average