Question

show work as necessary and please be neat

t CarMax Inc. reports sales of $15,875,118 thousand and cost of sales of $13,691,824 thousand for the year ended February 28, 2017. The gross profit for the year is: A) $2,183,294 thousand B) $1,464,362 thousand C) 86.2% D) 13.8% E) There is not enough information to determine gross profit. 39. Hauser Corporation has the following metrics for 2016. Amount in days Days sales outstanding Days payables outstanding Days inventory outstanding 2016 36.5 24.8 59.1 The cash conversion cycle for 2016 is: 22 days A) B) 61.3 days c) 47.4 days D) 70.8 days E) None of the above 40. The 2016 financial statements for BNSF Railway report the following information: Year ended December 31 2016 $19,829 61,250 84,122 (In milions) 52015 $21,967 59,510 81,703 Revenues Property and equipment, net Total assets The 2016 property, plant and equipment turmover is: A) 0.39 B) 2.38 C) 0.33 D) 0.70 E) None of the above 41. Note 3 to the 2016 financial statements of Willamette Valley Vineyards reports that Inventories consist of the following: 2015 $ 690,292 2016 $ 817,836 6,634,014 4,518,806 $11,970.656 Winemaking and packaging materials Work-in-process Finished goods 6.058,701 3,883,469 $10.632,462 Total inventories The company reported cost of goods sold of $7,204,884 in 2016 and $7,092,111 in 2015. At December 31, 2014, Total inventories were $ 9,910,570. Compute average days inventory outstanding for both years. What does this ratio mean? Interpret the ratios.

Answer 1

Ans 38 Ans 39 Gross Profit = Sales - Cost of Good Sold Particulars ($ in Thousands) Sales $1,58,75,118 Less: Cost of Good Sold $1,36,91,824 Gross Profit $21,83,294 The correct answer is option (a) i.e $2,183,294 thousand Days of sales outstanding (DSO): It is the average number of days the company's cusmer take pay their bills Days of inventory on hand (DOI): It is the average inventory processing period Days of Payable Outstanding (DPO): It is the average amount of days the company takes pay the its bills Cash Conversion Cycle (CCC): It is the length of time taken convert company's cash investment in inventory and back in cash from sale of that inventory Cash Conversion Cycle (CCC) = DSO+DOI-DPO Cash Conversion Cycle (CCC) [36.5+59.1-24.8] Cash Conversion Cycle (CCC) 70.8 days The correct answer is option (d) i.e 70.8 days Property Plant & Equipment Turnover Turnover Ratio : It the ratio between sales and the Property Plant & Equipment. It shows how well the Company's is using its Property, plant & equipment generate sales. Higher turnover indicates effective utilisation of Property, plant & equipment generate sales. Property Plant & Equipment Turnover : Net Revenue/ Net Property Plant & Equipment Particulars 2016 Opening Net Property Plant & Equipment $59,510 Add: Closing Net Property Plant & Equipment $61,250 Total (A) $1,20,760 Average (A)/2 $60,380 Revenue $19,829 Property Plant & Equipment Turnover The correct answer is option (c) i.e 0.33 Ans 40 0.33