11. Tamagachi, Inc. uses the FIFO inventory method. The following financial ratios are available for fiscal...
11. Tamagachi, Inc. uses the FIFO inventory method. The following financial ratios are available for fiscal year 2017 for Tamagachi, Inc.:
|
Days inventory outstanding |
28 |
|
Days sales outstanding |
42 |
|
Return on assets |
0.07 |
|
Return on equity |
0.13 |
|
Net profit margin |
0.05 |
|
Days payables outstanding |
39 |
Which of the following statements is true?
a. Tamagachi’s cash conversion cycle is 31 days.
b. Tamagachi’s cash conversion cyle is 53 days.
c. Tamagachi’s leverage is 6 percent.
d. Tamagachi’s leverage is 15 percent.
e. Tamagachi’s cash conversion cycle is 14 days.
Homework Answers
|
Days inventory outstanding |
28 |
|
Days sales outstanding |
42 |
|
Days payables outstanding |
39 |
Cash conversion cycle = Days inventory outstanding+Days sales outstanding - Days payables outstanding
= 28+42-39
= 31 days
The following statements is true
a. Tamagachi’s cash conversion cycle is 31 days
Correct option is a.
Kindly comment if you need further assistance. Thanks‼!
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