Total assets turnover: 1.1x Days sales outstanding: 32 days Inventory turnover r
ID: 2819593 • Letter: T
Question
Total assets turnover: 1.1x Days sales outstanding: 32 days Inventory turnover ratio: 3x Fixed assets turnover: 2.5x Current ratio: 1.5x Gross profit margin on sales: (Sales-Cost of goods sold)/Sales-30% "Calculation is based on a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent. Balance Sheet Current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity Cost of goods sold Cash Accounts receivable 55,000 Inventories Fixed assets Total assets Sales 96,250 $275,000Explanation / Answer
Balance Sheet Cash 56896.12 Current Liabilites 102666.67 Accounts Receivable 26520.55 Long term debt 55000 Inventories 70583.33 Common stock 21083.33 Fixed assets 121000 Retained Earnings 96250 Total Assets 275000 Total Liabilities and Equity 275000 Sales 302500 Cost of goods sold 211750 Working notes: Total Assets turnover = sales /Total assets 1.1 = sales/275000 Sales = 275000*1.1 Sales = 302,500 Days sales outstanding = (Accounts receivable/Sales) X365 days 32 days = (Accounts receivable/302,500) X 365 days Accounts Receivable = (32/365)*302500 Accounts Receivable = $26,520.55 Fixed assets turnover ratio = Sales/ Fixed assets 2.5 = 302,500/Fixed Assets Fixed Assets = 302500/2.5 Fixed Assets = 121,000 Gross Profit Margin on sales = (Sales -cost of goods sold)/Sales 0.3 = (302500-Cost of goods sold)/302500 0.3 X 302500 =302500-Cost of goods sold Cost of Goods Sold = 302,500-90,750 Cost of Goods Sold = 211,750 Inventory turnover ratio = Cost of goods sold /Inventories 3 =211,750/ Inventories Invetories = 211750/3 Invetories = 70,583.33 Cash = Total Assets - Accounts receivable- inventories -Fixed assets Cash = 275000 - 26520.55- 70583.33 -121000 Cash= 56896.12 Current ratio = Current Assets / Current liabilities 1.5 =(56896.12+26520.55+70583.33)/ Current liabilities 1.5 = 154000/Current liabilities Current liabilities = 154000/1.5 Current liabilities = 102666.67 Common stock =Fixed Assets -Current liabilites - Long term debt- Retained earnings