Question

1) accounts receivable turnover (2 decimal places)

2) average collection period (365 days in a year)

3) inventory turnover (2 decimal places round)

4) average sale period (365 days in a year)

5)operating cycle

6)total asset turnover

Weller Corporation Comparative Income statement and Reconciliation (dollars in thousands) This Year Last Year Sales $79,000 $74,000 Cost of goods sold 52.000 48.000 Gross margin 27,000 26,000 Selling and administrative expenses Selling expenses 8,500 8,000 Administrative expenses 12,000 11,000 Total selling and administrative expenses 20, 500 119,000 Net operating income 6,500 7.000 Interest expense 600 Net income before taxes 5,900 6,400 Income taxes 2, 360 2,560 Net income 3,540 3,840 Dividends to common stockholders 320 Net income added to retained earnings 3.220 3,240 Beginning retained earnings 26,660 23,420 Ending retained earnings $29,880 $26,660 600 600 Woller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Yea 6.42 Current assets 56.83 days $ 1,280 9,700 Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment $ 1,560 9, 100 8, 200 2,100 20,960 Accounts receivable turnover 2. Average collection period Inventory turnover 4. Average sale period 5. Operating cycle 16. Total asset turnover days 25,080 days 6.000 19, 200 25,200 $50.200 6,000 19,000 25,000 $45.960 $ $ 9.500 600 300 10,400 Buildings and equipment, net Total property and equipment Total assets Liabilities and stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-ter liabilities: Bonda payable Total liabilities Stockholders' equity Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholdere equity Total liabilities and stockholders' equity 0,300 700 300 9,300 5,000 000 13,400 10,300 800 800 5,000 29,880 34.880 350.280 4,200 5,000 26,660 31.660 545,960

Answer 1

1) Average accounts receivables= $(12300+9100)/2= $10700

Accounts receivable turnover= Sales/Average accounts receivables

= $79000/10700= 7.38

2) Average collection period= 365 days/Accounts receivable turnover ratio

= 365/7.38= 49.46 days

3) Average inventory= $(9700+8200)/2= $8950

Inventory turnover= Cost of goods sold/Average inventory

= $52000/8950= 5.81

4) Average sale period= 365 days/Inventory turnover

= 365/5.81= 62.82 days

5) Operating cycle= Average collection period+Average sale period

= 49.46+62.82= 112.28 days

6) Average inventory= $(50280+45960)/2= $48120

Total assets turnover= Sales/Average total assets

= $79000/48120= 1.64