berry0331
Newbie
Joined: 04 Sep 2011
Online Status: Offline
Posts: 49
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| Posted: 19 Aug 2012 at 18:34 | IP Logged
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I have questions regarding ratio. This is one of the Becker SIM4 problems.
Question1: This year, we made a decision to tighten our credit
policy due to some serious write off issues in prior years. It has slightly
reduced our credit sales overall, but our collection has become much
better.
Question2: This year, we made large investments in our fixed
assets, due to planned expansion. Our financing for these assets came
from issuance of new shares of stock. This was in line with our goal,
which we achieved, of handling all financing this year through equity,
rather than debt.
How do these scenarios have an impact on total asset turnover ratio? or
it's totally irrelevant?
Any help/input will be appreciated! :)
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Topic: Ratio
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