Galaxy United, Inc. 2009 Income Statement ($ in millions) Net sales $8,450 Less:

Question

Galaxy United, Inc. 2009 Income Statement ($ in millions) Net sales $8,450 Less: Cost of goods sold 7,230 Less: Depreciation 410 Earnings before interest and taxes 810 Less: Interest paid 83 Taxable Income 727 Less: Taxes 254 Net income $ 472 Galaxy United, Inc. 2008 and 2009 Balance Sheets ($ in millions) 2008 2009 2008 2009 Cash $ 130 $ 150 Accounts payable $1,100 $1,130 Accounts rec. 940 780 Long-term debt 1,000 1,289 Inventory 1,490 1,520 Common stock $3,180 $2,980 Sub-total $2,560 $2,450 Retained earnings 510 681 Net fixed assets 3,230 3,630 Total assets $5,790 $6,080 Total liab. & equity $5,790 $6,080 What is the days' sales in receivables? (use 2009 values)

Explanation / Answer

Answer:-

Net sales = $8450

Account receivables = 780

receivables turnover = sales/accounts receivable
receivables turnover = $8,450/780
receivables turnover = 10.83

sales in receivables:-

days' sales in receivables = 365 days/10.83
days' sales in receivables = 33.70 days

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