G Use the following information for questions 4-6. The 2016 Income Statement of Illini Company reported net sales of $8 million, cost of goods sold of $4.8 million, and net income of $800,000. The following table shows the company's comparative Balance Sheets for 2016 and 2015: 2016 ($ in 000s) 2015 ($ in 000s) Assets Cash $ 300 $ 380 Accounts receivable 700 500 Inventory 900 700 Property, plant, and equipment (net) 2,400 2,120 Total assets $4,300 $3,700 Liabilities and Shareholders' Equity Current liabilities $ 960 $ 830 Bonds payable 1,200 1,200 Paid-in capital 1,000 1,000 Retained earnings 1,140 670 Total liabilities and shareholders' equity $4,300 $3,700 The industry averages for Illini’s line of business are: Inventory turnover: 5 times Average collection period: 25 days Asset turnover: 1.8 times In the following questions, assess Illini's asset management relative to its industry by calculating the key three activity ratios above.

Account receivable turnover ratio = 13.3

ROE= 4.19

Explanation:

Inventory turnover = 5 times

Cost of goods sold = $4.8 million

we know that:

Inventory turnover ratio = Cost of goods sold / Average inventory

  5 =  4.5 / Average inventory

 Average inventory = 4.5 / 5 = $ 0.9 million.

Account receivable (2016)= 700,000

Account receivable (2015)=500,000

we know that:

Average account receivable = [(open) A/c receivables + (end) a/c receivable ] / 2

              =  (500,000+700,000) /2

  Average account receivable = $ 600,000  

we know that: Account receivable turnover ratio= net credit sales / average account receivable.

                           =  8000000/600000

  Account receiable turnover ratio        = 13.3.

Asset turnover ratio= 1.8 times

sales = $ 8000000

we know that total asset turnover ratio= total sales / Total asset

                     1.8 = 8000000/Total assets

             Total assets = 8000000/1.8

            Total assets      =$4,444,444

Return on equity = Net income /Average shareholder equity

Average shareholder equity =[(open) equity + (end) equity)] / 2

  Paid-up capital + retained earning (2016)=1000+1140=2140,000

  Paid-up capital + retained earning (2015)=1000+670= 1670,000

Average shareholder equity =( 2140,000+1670,000) / 2

                                               =$1905,000

Return on equity   =  8000000/1905000 = 4.19

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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