Week 4 EOC: Quiz Chapter 4 Question 3

a. Compare Rachel’s Cash % with the chain’s %.  Is it higher or lower?  What might this mean?

b. Compare Rachel’s Inventories % with the chain’s %.  Is it higher or lower?  What might this mean?

c. Compare Rachel’s Accounts Payable % with the chain’s %.  Is it higher or lower?  What might this mean?

d. Compare Rachel’s Notes Payable % with the chain’s %.  Is it higher or lower?  What might this mean?

Answers:

a. Rachel's cash % is higher at 18.9% because her restaurant has more of its assets in the  form of cash.

b. Rachel's inventories % is higher at 11.4% because her restaurant has more of its assets in the form of inventories.

c. Rachel's accounts payable % is higher at 11.3% because the chain has less that it owes to others.

d. Rachel's notes payable % is higher at 2.5% She owes more than the chain.