Question
In: Finance
AAA's inventory turnover ratio is 10.55 based on sales of $15,400,000. The firm's current ratio equals...
AAA's inventory turnover ratio is 10.55 based on sales of $15,400,000. The firm's current ratio equals 2.54 with current liabilities equal to $1,270,000. If the firm's cash and marketable securities equal $406,199, what is the firm's days sales outstanding? (Round your answer to two decimal places.)
Solutions
Expert Solution
66.83
| Step-1:Calculation of current assets | |||||||
| Current assets | = | Current Liabilities | * | Current Ratio | |||
| = | $ 12,70,000.00 | * | 2.54 | ||||
| = | $ 32,25,800.00 | ||||||
| Step-2:Calculation of Accounts receivable | |||||||
| Accounts Receivable | = | Current assets | - | Cash and marketable securities | |||
| = | $ 32,25,800.00 | - | $ 4,06,199.00 | ||||
| = | $ 28,19,601.00 | ||||||
| Step-3:Calculation of Accounts receivable turnover ratio | |||||||
| Accounts receivable turnover ratio | = | Sales | / | Accounts Receivable | |||
| = | $ 1,54,00,000.00 | / | $ 28,19,601.00 | ||||
| = | 5.46 | ||||||
| Step-4:Calculation of days sales outstanding | |||||||
| Days sales outstanding | = | Days in a year | / | Accounts receivable turnover ratio | |||
| = | 365 | / | 5.46 | ||||
| = | 66.83 | ||||||
jeff jeffy answered 1 year agoRelated Solutions
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