Question

(e) Ratio Analysis Zipper Corporation reported the following condensed income statement for 2015: Sales Cost of goods sold Gross profit Less expenses Net income before taxes Less income taxes Net income after taxes $5,300,000 3,710,000 $1,590,000 -1,340,000 $250,000 100,000 $150,000 Assume the following: Average inventory Average accounts receivable Average accounts payable $680,000 $1,290,000 $400,000 (Use 365 days a year) Compute the following: (Round answers to 2 decimal places, e.g. 52.75.) Inventory turnover times Accounts receivable turnover times Average number of days to sell an item days Average number of days to collect an account receivable days Number of days in operating cycle days Click if you would like to Show Work for this question: Open Show Work Attempts: 0 of 3 used SAVE FOR LATER SUBMIT ANSWER

Answer 1

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Zipper Corporation	2015				2015
Sales	5,300,000.00	H	Inventory Turnover		5.46
Cost of goods sold	3,710,000.00	I	Cost of goods sold/ Average Inventory
Gross Profit	1,590,000.00	J
Less Expenses	1,340,000.00		Accounts Receivables Turnover		4.11
Income before taxes	250,000.00		Sales Revenue/ Average Accounts Receivable
Less Income taxes	100,000.00
Net Income (loss)	150,000.00	M	Days of sales in Inventory
			365/ Inventory Turnover		66.90
Average Inventory	680,000.00
Average accounts receivable	1,290,000.00		Accounts Receivables collection (days)
Average accounts payable	400,000.00		365/ Accounts Receivables Turnover		88.84
			Operating cycle (days)		116.39
			Accounts Receivables collection (days) + Days of sales in Inventory- Accounts Payables Turnover (days)
			Accounts Payables Turnover		9.28
			Cost of goods sold/ Average accounts payable
			Accounts Payables Turnover (days)
			365/ Accounts Payables Turnover		39.35