Week 4 EOC: Chapter 4 Question 3

a. Compare Rachel’s Cash % with the chain’s %.  Is it higher or lower?  What might this mean? Rachel's Cash % is 3.7% while the chain's is 6.70%. Rachel's is lower so that means she has a lower cash flow than chain's average. 

b. Compare Rachel’s Inventories % with the chain’s %.  Is it higher or lower?  What might this mean? Rachel's Inventory % is 2.3% as opposed to the chain's 1.30%. Which means that her inventory is more than the chain's average inventories."There is no guarantee that payment for all inventories will be collected in full, and thus some may end up being reported as receivables." (124)

c. Compare Rachel’s Accounts Payable % with the chain’s %.  Is it higher or lower?  What might this mean? Rachel's Accounts Payable % is 11.3% and the chain's average is. "10.50%. This implies that Rachel has more into her accounts payable than the chain's average rate. "The most important sub-classifications of current liabilities include notes payable, income taxes payable, and accounts payable." (127)

d. Compare Rachel’s Notes Payable % with the chain’s %.  Is it higher or lower?  What might this mean? Rachel's Notes Payable % is 2.5% while the chain's rate is 1.10%. This means that Rachels has more into her notes payble than the average. "In the hospitality industry, current liabilities typically consist of payables resulting from the purchase of food, beverages, products, services, and labor." (127)