FILL IN THE FOLLOWING 9 BOXES AND ANSWER THE QUESTION THAT FOLLOWS. The table provides financial data for 'Plants 'n Growin' Things Nursery' and 'When It Grows Nursery' including Net income after taxes, Net sales, Current assets, Current liabilities, Cost of goods sold, and Average inventory. You must calculate the Return on Sales, Current Ratio, and Inventory Turnover for both nurseries and determine which nursery is doing better for each ratio. Finally, answer: After calculating the above ratios and determining which nursery is doing better in each individual ratio, which nursery are you most interested in? Why?

FILL IN THE FOLLOWING 9 BOXES AND ANSWER THE QUESTION THAT FOLLOWS. The table provides financial data for 'Plants 'n Growin' Things Nursery' and 'When It Grows Nursery' including Net income after taxes, Net sales, Current assets, Current liabilities, Cost of goods sold, and Average inventory. You must calculate the Return on Sales, Current Ratio, and Inventory Turnover for both nurseries and determine which nursery is doing better for each ratio. Finally, answer: After calculating the above ratios and determining which nursery is doing better in each individual ratio, which nursery are you most interested in? Why?

Answer

Step 1: Calculate Return on Sales (Net Income / Net Sales). For Plants 'n Growin': $59,000 / $190,000 = 31.05%. For When It Grows: $209,000 / $980,000 = 21.33%. Plants 'n Growin' is doing better because it generates more profit per dollar of sales. Step 2: Calculate Current Ratio (Current Assets / Current Liabilities). For Plants 'n Growin': $289,000 / $178,000 = 1.62. For When It Grows: $499,000 / $388,000 = 1.29. Plants 'n Growin' is doing better as it has a higher liquidity buffer to cover short-term debts. Step 3: Calculate Inventory Turnover (Cost of Goods Sold / Average Inventory). For Plants 'n Growin': $121,000 / $22,000 = 5.5 times. For When It Grows: $688,000 / $90,000 = 7.64 times. When It Grows is doing better because it moves its inventory more frequently, indicating better efficiency. Summary: Plants 'n Growin' wins 2 out of 3 categories. Final Question: I am most interested in Plants 'n Growin' Things Nursery because it shows significantly higher profitability (Return on Sales) and a stronger liquidity position (Current Ratio), suggesting it is more financially stable and efficient at generating profit despite its smaller scale.