ABC Inc. is a Corporation with a focus on Garment and textile manufacturing in the UAE. They are now looking to finance their new project, are looking for a bank to give them a loan. Calculate the following ratios for both 2018 and 2019, interpret and analyze them:Days Sales in InventoryAverage Collection Period Standalone statement of financial positionAs at 31 December20192018NoteAEDAEDASSETSNon-current assetProperty and equipment41,012,9841,213,595Investments in subsidiaries1,343,5822,356,5662.21,213,595Current assetsInventories5,529,691193,441,50352,580,86333,455,65924,349,497309,357,213310,570,808Trade and other receivables6.Due from related partiesLoan to related parties179,413,089121,670,89280,115,25326,318,7391111Cash and bank balances7407,517,973409,874,539Total assetsEQUITY AND LIABILITIESEQUITYShare capitalRetained earningsTotal equity3,900,000358,743,2393,900,000279,803,469283,703,469362,643,239LIABILITIESNon-current liabilities252,073252,073Provision for employees' end of service benefits355,785355,785Current liabilitiesTrade and other payablesDue to a related partyBank borrowings101,123,52326,729,06419,022,92846,875,51547,231,300409,874,5396,079,56820,415,438120,26026,615,26626,867,339310,570,8081117Total liabilitiesTotal equity and liabilities Standalone statement of comprehensive incomeYear ended 31 December20192018NoteAEDAED967,215,339(862,141,258)105,074,081Revenue12813,481,889Cost of sales13(722,094,232)91,387,657Gross profitAdministrative and selling expenses14(30,183,413)978,095(27,340,230)11,221,861Other incomeReversal of/(provision for) impairment of tradereceivables15(7,716,272)67,553,0166.4,167,78380,036,546Operating profitFinance cost18(1,097,922)1,146(1,096,776)(545,088)3,548(541,540)Finance income18Finance cost - net18Profit for the year78,939,77067,011,476Other comprehensive income for the yearTotal comprehensive income for the year78,939,77067,011,476

Days Sales in Inventory is the time required to convert inventory into sales. Formula: Days Sales in…

Answered: Days Sales in Inventory

Business

Accounting

Days Sales in Inventory

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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