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.