Cash and short-term investments Accounts Receivable (net) Inventories Prepaid Ex

Question

Cash and short-term investments Accounts Receivable (net) Inventories Prepaid Expenses and other current assets Total Current Assets As of Dec. 31, 2010 Dec. 31, 2009 1,267,038 616,604 490,816 665,828 38,599 487,505 292.511291.915 $2,388964 $2,061,852 Short-term borrowings Current portion of long-term debt Accounts payable Accrued liabilities Income taxes payable Total Current Liabilities s 25,190 38,108 182,295 210,090 96,307 334,247 941,912743,999 203.049 239.793 1,648,753 1,566,237 Net Sales Cost of Goods Sold Operating Income Net Income $4,885,340 2,542,353 733,541 230,101

Explanation / Answer

Ans1: c)102.94 days

Solu: Days of other financing = accounts receivable days + inventory days

accounts receivable days:

A/R Turnover =4,885,340 / [(490,816 + 665,828) .5 ]

AR Days= 365/ AR turnover

                =8.45 365 / 8.45 = 43.20 days

Inventory days:

Inventory Turnover =2542353 / [(338599+487505)/2 ] =6.16

inventory Days= 365/ Inventory Turnover=59.74 days

Days of other financing =43.20+59.30=102.94 days

Ans 2:a) 48.09 days

Solu:Average A/P = (296,307 + 334,247)/2 = 315,277

A/P Turnover = 7.59 times

Average payable days Days = 365 / 7.59 = 48.09             

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