1. Bowa Construction's days sales outstanding is 50 days (on a 365-day basis). The company's accounts receivable equalP100 million and its balance sheet shows inventory equal to P125 million. What is the company's inventory turnoverratio?E. 7.25А. 2.75B. 3.33C. 4.25D. 5.842. AB Company's budgeted sales and cost of sales for the coming year are P72 million and P45 million respectively. Shortterm interest rates are expected to average 10%. If the company can increase inventory turnover from its current levelof 9 times per year to 12 times per year, its cost savings in the coming year are expected to beA. P125,000В. Р300,000C. P375,000D. P500,0003. BMC Co. has an average A/R balance of P1,250,000, average inventory balance of P1,750,000, and average accountspayable balance of P800,000. Its annual sales are P12,000,000 and its cost of goods sold represents 80% of annualsales. Assume there are 365 days in a year. What is BMC Co.'s cash conversion cycle?A. 53.23 daysB. 60.83 daysC. 72.28 daysD. 84.15 daysE. 100.55 daysKK Co pormally takite average daily credit purchasee of P2 000 Its average daily sales are

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1. Bowa Construction's days sales outstanding is 50 days (on a 365-day basis). The company's accounts receivable equal P100 million and its balance sheet shows inventory equal to P125 million. What is the company's inventory turnover ratio? A. 2.75 В. 3.33 C. 4.25 D. 5.84 E. 7.25

1. Bowa Construction's days sales outstanding is 50 days (on a 365-day basis). The company's accounts receivable equal P100 million and its balance sheet shows inventory equal to P125 million. What is the company's inventory turnover ratio? A. 2.75 В. 3.33 C. 4.25 D. 5.84 E. 7.25

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1. Bowa Construction's days sales outstanding is 50 days (on a 365-day basis). The company's accounts receivable equal
P100 million and its balance sheet shows inventory equal to P125 million. What is the company's inventory turnover
ratio?
E. 7.25
А. 2.75
B. 3.33
C. 4.25
D. 5.84
2. AB Company's budgeted sales and cost of sales for the coming year are P72 million and P45 million respectively. Short
term interest rates are expected to average 10%. If the company can increase inventory turnover from its current level
of 9 times per year to 12 times per year, its cost savings in the coming year are expected to be
A. P125,000
В. Р300,000
C. P375,000
D. P500,000
3. BMC Co. has an average A/R balance of P1,250,000, average inventory balance of P1,750,000, and average accounts
payable balance of P800,000. Its annual sales are P12,000,000 and its cost of goods sold represents 80% of annual
sales. Assume there are 365 days in a year. What is BMC Co.'s cash conversion cycle?
A. 53.23 days
B. 60.83 days
C. 72.28 days
D. 84.15 days
E. 100.55 days
KK Co pormally tak
ite average daily credit purchasee of P2 000 Its average daily sales are

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