Homework Answers
| (a) | ||||||
| (i) | Gross profit percentage | = | (Net Sales - Cost of goods sold)/Net Sales | |||
| = | (650000-590000)/650000 | |||||
| = | 9.23% | |||||
| (ii) | Inventory turnover | = | Cost of goods sold/Average Inventory | |||
| = | 590000/74500 | |||||
| = | 7.92 | |||||
| Working: | ||||||
| Average Inventory | = | (85000+64000)/2 | ||||
| = | 74,500 | |||||
| (iii) | Receivable turnover | = | Net Sales / Average accounts receivable | |||
| = | 650000/65000 | |||||
| = | 10.00 | |||||
| Working: | ||||||
| Average Accounts Receivable | = | (50000+80000)/2 | ||||
| = | 65,000 |
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