Would you say that the three companies exhibit similar performance or quite different performance in terms of collecting receivables? Why do you think that might be?

Utilizing book: Principles of Managerial Finance, Brief, 8
th Edition
By: Chad J. Zutter; Scott B. Smart
Publisher: Pearson, 2019

Answer the following questions from chapter 3 page 126, prob P3-15
Interpreting liquidity and activity
ratios.

Interpreting liquidity and activity
ratios: The table below shows key financial data for three firms that compete
in the consumer products market: Procter & Gamble, Colgate-Palmolive, and
Clorox. All dollar values are in thousands.
Procter
& Gamble Colgate-Palmolive Clorox
Sales $65,231 $15,195 $5,875
Cost of goods sold $32,967 $6,072 $3,233
Receivables $4,729 $1,411 $514
Inventory $4,787 $1,171 $501
Total Current Assets $25,572 $4,338 $1,549
Total Current Liabilities $28,891 $3,305 $2,037
Total Assets $117,033 $12,123 $4,568

a.
Calculate each of the following ratios for all three companies: current
ratio, quick ratio, inventory turnover, average collection period, total asset
turnover.
b.
Which company is in the position of having greatest liquidity?
c.
Would you say that the three companies exhibit similar performance or
quite different performance in terms of collecting receivables? Why do you
think that might be?
d.
Which company has the most rapid inventory turnover? Which company
appears to be least efficient in terms of total asset turnover? Are your
answers to those questions a little surprising? If a company is best at
inventory turnover and worst at total asset turnover, what do you think that
means?

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