Question

Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 800,000 shares of common stock were outstanding. The interest rate on the bond payable was 12%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the company’s common stock at the end of this year was $18. All of the company’s sales are on account.

Answer 1

Answer:

a lot of information is missing, so I looked for a similar question:

1) accounts receivable turnover = net sales / average accounts receivable = $79,000 / [($12,300 + 9,100)/2] = 7.38

2) average collection period = 365 days /  accounts receivable turnover ratio = 365 / 7.38 = 49.46 days.

3) inventory turnover = COGS / average inventory = $52,000 / [($9,700 + $8,200)/2] = 5.81  

 

4) average sale period = 365 days / inventory turnover = 365 / 5.81 = 62.82 days

5) Operating cycle = average sale period + average collection period = 49.46 + 62.82 = 67.28 days

6) total assets turnover ratio = net sales / average assets  = $79,000 / [($52,2800 + $45,960)/2] = 1.64