For the past year, Coach, Inc., had a cost of goods sold of $68,382. At the...

For the past year, Coach, Inc., had a cost of goods sold of $68,382. At the end of the year, the accounts payable balance was $11,889.

How long on average did it take the company to pay off its suppliers during the year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Days’ sales in payables days

Expert Solution

Days’ sales in payables

Days’ sales in payables is calculated by using the following formula

Days’ sales in payables = Number of days in a year / Accounts Payable Turnover Ratio

Accounts Payable Turnover Ratio = Cost of goods sold / Accounts Payables

= $68,382 / $11,889

= 5.75 Times

Therefore, the Days’ sales in payables = Number of days in a year / Accounts Payable Turnover Ratio

= 365 Days / 5.75 Times

= 63.48 Days

It would take on an average 63.48 days for the company to pay off its suppliers during the year

“Therefore, the Days’ sales in payables = 63.48 Days”

jeff jeffy answered 2 years ago

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