ACC 230 Week 8 CheckPoint Interpreting Financial Ratios

ACC 230 Week 8 CheckPoint Interpreting Financial Ratios

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Interpreting Financial Ratios

Luna Lighting, a retail firm, has experienced modest sales growth over the past three years

but has had difficulty translating the expansion of sales into improved profitability. Using

three years' financial statements, you have developed the following ratio calculations and

industry comparisons. Based on this information, suggest possible reasons for Luna's profitability problems.


2009 2008 2007 2009


Average collection period 45 days 46 days 47 days 50 days

Inventory turnover

Fixed asset turnover

Total asset turnover

Debt ratio 50%50% 50% 54%

Times interest earned ...

ACC 230

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Answered by 2 years ago
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ACC 230 Week 8 CheckPoint Interpreting Financial Ratios

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Excerpt from file: InterpretingFinancialRatios LunaLighting,aretailfirm,hasexperiencedmodestsalesgrowthoverthepastthreeyears buthashaddifficultytranslatingtheexpansionofsalesintoimprovedprofitability.Using threeyearsfinancialstatements,youhavedevelopedthefollowingratiocalculationsand

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Asked: 2 years ago