Question

Use the following information to answer this question. Windswept, Inc. 2010 Income Statement ($ in millions) Net sales $ 9,920 Less: Cost of goods sold 8,140 Less: Depreciation 490 Earnings before interest and taxes $ 1,290 Less: Interest paid 120 Taxable Income $ 1,170 Less: Taxes 410 Net income $ 760 Windswept, Inc. 2009 and 2010 Balance Sheets ($ in millions) 2009 2010 2009 2010 Cash $ 300 $ 330 Accounts payable $ 1,670 $ 1,935 Accounts rec. 1,140 1,040 Long-term debt 1,190 1,345 Inventory 2,030 1,790 Common stock $ 3,520 $ 3,090 Total $ 3,470 $ 3,160 Retained earnings 680 930 Net fixed assets 3,590 4,140 Total assets $ 7,060 $ 7,300 Total liab. & equity $ 7,060 $ 7,300 What is the days' sales in receivables? (use 2010 values)

Answer 1

Answer: 38.27 days or 38.3 days

.

Numerator	÷	Denominator	X	Days	=	Days' sales in receivables
Accounts Revceivables	÷	Net Credit sales	X	365	=	Days' sales in receivables
$1,040	÷	$9,920	X	365	=	38.27	days