Answered: Cash Accounts receivable Inventories…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 14P

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Cash Accounts receivable Inventories Total current assets Oriole Sports Equipment Company $ 687,800 1,844,500 1,320,700 $3,853,000 Liabilities and Equity Accounts payable Notes payable Total current liabilities $1,739,900 2,113,100 $3,853,000 Sales and Costs Net sales Cost of goods sold $9,901,700 $5,955,500 Calculate the firm’s days sales outstanding. (use 365 days for calculation. Round answer to 1 decimal place e.g 15.1) Days sales outstanding —— What is the firms days sales in inventory? Days payables outstanding? Operating cycle? How does it compare with the industry average of 75 days? Is the firm efficient or inefficient in managing it's receivable and inventory as its operating cycle exceeds, is at par with or deceeds the industry average. What is cash conversion days? How does it compare with the industry average of 42.1 days? The firm’s cash conversion cycle is on a deceeds, exceeds or par with the industry average.

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