Comparative Calendar-Year Financial Data for a Company Are Shown Below

question 77

Essay

Comparative calendar-year financial data for a company are shown below.Calculate the following ratios for the company for 2018:
(a)accounts receivable turnover
(b)day's sales uncollected
(c)inventory turnover
(d)days' sales in inventory
$$\begin{array} { | l | r | r | } \hline & \underline { 2018 } & { 2017 } \\\hline \text { Sales } & \$ 720,000 & \$ 607,500 \\\hline \text { Cost of goods sold } & 450,000 & 382,700 \\\hline \text { Operating expenses } & 168,500 & 134,900 \\\hline \text { Net income } & 51,200 & 51,700 \\\hline & & \\\hline & \text { December } 31 , & \text { December } 31 , \\\hline & \underline { 2018 } & \underline { 2017 } \\\hline \text { Accounts receivable (net) } & \$ 157,500 & \$ 162,500 \\\hline \text { Inventory } & 139,500 & 110,500 \\\hline \text { Total assets } & 1,012,500 & 944,800 \\\hline\end{array}$$

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Definitions:

Time To Expiration

The duration until the expiry date of a financial instrument, such as an option or futures contract.

Real Goods

Physical, tangible products and commodities that can be used, consumed, or sold.

Call Options

Financial derivatives that give the purchaser the right, but not the obligation, to buy a stock or other asset at a specified price within a certain time frame.