Given the following financial statements (below and on page 96), historical ratios, and industry averages, calculate Sterling Company’s financial ratios

Integrative—Complete ratio analysis

Given the following financial statements (below and on page 96), historical ratios, and industry averages, calculate Sterling Company’s financial ratios for the most recent year. (Assume a 365-day year.) Analyze its overall financial situation from both a cross-sectional and a time-series viewpoint. Break your analysis into evaluations of the firm’s liquidity, activity, debt, profitability, and market.

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Tinikits, Inc. is the manufacturer of miniature models, especially of automobiles with historical interest

Tinikits, Inc. is the manufacturer of miniature models, especially of automobiles with historical interest. The company is developing new standard costs. Trent Roswell suggests that the new standards for materials should not include any waste for liquid plastics that spill out of the molds. "After all," he says, "we're trying to be a world class company. When we build in waste, we tell the workers it's okay to waste some." Betty Farrell, another manager, disagrees. "If we don't allow for some normal human error," she says, "we'll have a mighty unhappy work force. Also, I think that these kinds of perfection standards exploit the workers. I certainly wouldn't want to be held up to perfection every day—what could I do but fail?"



The argument continued. Finally, the standards were prepared. All standards were prepared according to normal expected performance, except that for materials, an ideal standard was used. Betty, still maintaining the unfairness of the system, refused to hold her workers accountable for materials quantity variances.

Do you think it's fair to use ideal standards to evaluate a department or workers ? Is it unethical for Betty to refuse to support the standards? Explain.


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Esplanade Company's credit sales have the following historical pattern

Esplanade Company's credit sales have the following historical pattern:
70% Collected in the month of sale
15% Collected in the first month after sale
10% Collected in the second month after sale
4% Collected in the third month after sale
1% Uncollectible

These sales on open account (credit sales) have been budgeted for the last six months in 2010:
July $60,000
August $70,000
September $80,000
October $90,000
November $100,000
December $85,000

1) Determine the estimated total cash collections from accounts receivable during October 2010.
2) Compute the estimated total cash collections during the fourth quarter from credit sales of the fourth quarter.

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