As REVLON ltd company controller, you are responsible for informing the board of directors about…
1 answer below »As REVLON ltd company controller, you are responsible for informing the board of directors about financial activities. At the board meeting, you present the following information 2020 2019 2018 Sales Trend percent 147.0% 135.0% 100.0% Selling expenses to sales 10.1% 135.0% 100.0% Sales to plant assets ratio 3.8 to 1 3.6 to 1 3.3 to 1 Current ratio 2.9 to 1 2.7 to 1 2.4 to 1 Acid test ratio 1.1 to 1 1.4 to 1 1.5 to 1 Inventory turnover 7.8 times 9.0 times 10.2 times Accounts Receivable turnover 7.0 times 7.7 times 8.5 times Total Assets Turnover 2.9 times 2.9 times 3.3 times Return on total Assets 10.4 % 11.5 % 14.1 % Return on stockholders’ Equity 10.7 % 11.5 % 14.1 % Profit Margin ratio 3.6 % 3.8 % 4.0 % After the meeting, the company’s CEO holds a press conference and with the analysists in she mentions the following ratios 2020 2019 2018 Sales Trend percent 147.0% 135.0% 100.0% Selling expenses to sales 10.1% 135.0% 100.0% Sales to plant assets ratio 3.8 to 1 3.6 to 1 3.3 to 1 Current ratio 2.9 to 1 2.7 to 1 2.4 to 1 Required: a) Why do you the CEO decided to report on 4 ratios instead of the 11 prepared ( 10 marks) b) Comment on the possible consequences of the CEO’s reporting of the ratios selectively ( 10 marks)
Attachments: BAF4101-FINAN….docxMar 19 2022 02:41 PM
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