Question

A.) How do you find the following asset management ratios?

1. average collection period

2. average days in inventory

3. total asset turnover

B.)please find the previous three ratios for the company Anheuser-Busch.

Answer 1

To find out Average Collection peroid firstly we need to calcutate the account turnover ratio i.e. all credit sales divided by average of account recivables and after finding this we need to divide the ratio by 365 days to find out average collection peroid of the company

Average days in inventory = (Average inventory/cost of good sold)*365

total assest turnover ratio= Net sale/ avergae total assets

so we are going to find out the above 3 ratio of the given company and for which we are take financial statement of june quater 2020 into consideratation:

Average collection peroid: Global Revenue is 10295 million dollar

account recivalbles is 3465 million dollar

91 days in quater

= (3465/10295)*91days

=20.62 days

Average days of inventory

= closing inventry also called average inventory i.e. 2234million dollar (assumed)

= cost of good sold is 4865(data from website) i.e. 4456million dollar

=( 2234/4456)*91days

=45.62 days

total assest turnover ratio

net sale i.e. 1025 million dollar

avergae total asset of that quater is 5564million dollar

=1025/5564

=.18