Need to validate the last 4 ratios. Thank you in advance 7,816 CONSOLIDATED BALA

Question

Need to validate the last 4 ratios. Thank you in advance

              7,816

CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts)    December 31, 2015 ASSETS    Current assets    Cash and cash equivalents                  7,692 Short-term marketable securities               19,511 Accounts receivable, net                  6,838 Inventories               19,533 Deferred income taxes—current                  1,888 Prepaid expenses and other                  3,852    Total current assets               59,314 Long-term marketable securities                  5,989 Property and equipment, net               82,447 Deferred income taxes—non-current                  1,315 Other assets, net                  3,940    Total assets             153,005    LIABILITIES AND SHAREHOLDERS’ EQUITY    Current liabilities    Accounts payable               11,046 Accrued compensation and benefits                  6,389 Deferred revenue                  4,625    Total current liabilities               22,060 Other Liabilities                        -   Deferred lease credits and other long-term liabilities                  3,506    Total liabilities               25,566 Shareholders’ equity    Common stock *               93,246 Accumulated other comprehensive loss, net of tax                      (15) Retained earnings               34,208    Total shareholders’ equity             127,439    Total liabilities and shareholders’ equity             153,005 * Common stock:13,516,000 shares outstanding    CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts)    2015 Retail stores             141,377 Specialty sales               69,116    Net revenue             210,493 Cost of sales               98,928 Operating expenses               66,272 General and administrative expenses               20,634 Depreciation and amortization expenses                  8,609    Total costs and expenses from operations             194,443    Income from operations               16,050 Interest income                  2,458 Interest expense                (6,002)    Income before income taxes               12,506 Income tax provision                  4,690    Net income   

              7,816

Explanation / Answer

Accounts Recievable days tells how long company takes to collect its account recievables

Account Recievable days = (Account Recievable/Revenue)*365 = Account Recievable/Avg. daily sales

In this case, accounts receivables = 6838

Revenue = 210,493

So Account Recievable days = (6838/210493)*365 = 12 days

Account payable days tells us how long it takes to repay the suppliers

Account Payable days = (Account payable/COGS)*365 = Account Payable/Avg. daily COGS

In this case, accounts payables = 11046

COGS = 98,928

So Account payable days = (11046/98928)*365 = 41 days

Inventory days tells how long it takes to convert inventory into sales

Inventory days = (Inventory/COGS)*365 = Inventory/Avg. daily COGS

In this case, Inventory = 19533

COGS = 98,928

So Inventory days = (19533/98928)*365 = 72 days

Times interest earned tells the company's ablitiy to meet its debt obligation

Times interest earned = EBIT/interest expense

In this case, EBIT = 16,050

Interest expense = 6,002

Times interest earned = 16050/6002 = 2.67

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