Homework Answers
20. Inventory Conversion Period = Inventory / COGS p.a / 365 Days
| Inventory | 1800000*55%= | $990000 |
| COGS pm | Given | $1800000 |
| COGS pa | 1800000*12 | $21600000 |
| COGS per day | 21600000/365 | $59178.08 |
| Conversion Period | $990000/59178.08 | 16.73 DAYS |
Answer: Option E:18.2 days since near to 16.73 days.
30.
| Sl.No | Particulars | Calculation | Amount |
| a | Current Year Sales | $550 Million | |
| b | Increase by | 15% for next Year | |
| c | Next Year Sales projected | $550*115% | $632.5 Million |
| d | Inventory To be Maintained | $30.2+0.20(Sales) | |
| e | Inventory for next year | $30.2+0.20*(632.5) | $156.7 Million |
| f | Inventory Turnover Ratio for Next Year | $632.5/156.7 | 4.04 Days |
Answer: Option D: 4.04 Days
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20. Your firm's cost of goods sold (COGS) average $1,800,000 per month, and it keeps inventory...
40. Your firm's cost of goods sold (COGS) average $1,600,000 per month, and it keeps inventory...
40. Your firm's cost of goods sold (COGS) average $1,600,000 per month, and it keeps inventory equal to 55% of its monthly COGS on hand at all times. Using a 365-day year, what is its inventory conversion period? a. 11.7 days b. 13.4 days c. 14.4 days d. 15.2 days e. 18.2 days
10. Fairchild 10. Fairchild Garden Supply expects $580 million of sales this year, and it forecasts...
10. Fairchild 10. Fairchild Garden Supply expects $580 million of sales this year, and it forecasts a 15% increase for next year. The CFO uses this equation to forecast inventory requirements at different levels of sales: Inventories – $30.2 + 0.20 (Sales). All dollars are in millions. What is the projected inventory turnover ratio for the coming year? a. 3.40 b. 3.57 c. 3.75 d. 4.07 e. 4.10
Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000...
Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000 Blue Ostrich's CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to complete the following table. (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places.) Value Inventory conversion period Average collection period Payables deferral period Cash conversion cycle...
40. Your firm's cost of goods sold (COGS) average $1,600,000 per month, and it keeps inventory equal to 55% of its monthly COGS on hand at all times. Using a 365-day year, what is its inventory conversion period? a. 11.7 days b. 13.4 days c. 14.4 days d. 15.2 days e. 18.2 days
10. Fairchild 10. Fairchild Garden Supply expects $580 million of sales this year, and it forecasts a 15% increase for next year. The CFO uses this equation to forecast inventory requirements at different levels of sales: Inventories – $30.2 + 0.20 (Sales). All dollars are in millions. What is the projected inventory turnover ratio for the coming year? a. 3.40 b. 3.57 c. 3.75 d. 4.07 e. 4.10
Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000 Blue Ostrich's CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to complete the following table. (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places.) Value Inventory conversion period Average collection period Payables deferral period Cash conversion cycle...
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