The Robinson Company has the following current assets and current liabilities fo

Question

The Robinson Company has the following current assets and current liabilities for these two years:

2010 2011
Cash and marketable securities $ 50,000 $ 50,000
Accounts receivable 300,000 350,000
Inventories 350,000 500,000
Total current assets $700,000 $900,000
Accounts payable $200,000 $250,000
Bank loan 0 150,000
Accruals 150,000 200,000
Total current liabilities $350,000 $600,000

If sales in 2010 were $1.2 million, sales in 2011 were $1.3 million, and cost of goods sold was 70 percent of sales, how long were Robinson

Explanation / Answer

2010 2011 sales           1,200,000           1,300,000 Cogs(sales*70%)             840,000             910,000 Inventory             350,000             500,000 Receivable             300,000             350,000 operating cycles cycles = Avg. Inventory/COGS / 365 + Avg. Accounts Receivable/Credit Sales / 365 Operating cycle                    243                    299 Operating cycle increased in 2011 due to increase in Inventory

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.