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A firm reports the following data:________.

Sales: $445,000
Accounts Receivable Balance: $50,000
Cost of Goods Sold: $280,000
Inventory Balance: $50,000
Accounts Payable Balance: $42,000
Calculate the following matrics:
A/R days
Inventory days
A/P days
Cash-to-Cash days
When making your calculations, please follow conventional rules for rounding up or down to arrive at your answer.
A/R days ____
Inventory days ____
A/P days ____
Cash-to-Cash days ____

User PTomasz
by
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1 Answer

2 votes

Answer and Explanation:

The computation is shown below:

a. For Account receivable days is

= Total number of days in a year × account receivable balance ÷ Sales

= 365 days × $50,000 ÷ $445,000

= 41.01 days

b. For inventory days

= Total number of days in a year × inventory balance ÷ Cost of Goods sold

= 365 days × $50,000 ÷ $280,000

= 65.18 days

c. For Account payable days

= Total number of days in a year × account payable balance ÷ Cost of Goods sold

= 365 days × $42,000 ÷ $280,000

= 54.75 days

d. For a cash to cash days

= Account receivable days + inventory days - account payable days

= 41.01 + 65.18 + 54.75

= 51.44 days

User Cvakiitho
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6.4k points