What are the firm’s days’ sales outstanding for 2018 and 2019? Income Statements ($ in millions) Balance Sheets ($ in millions) 2018 2019 Assets 2018 2019 Sales Revenue $2,580 $2,865 Cash $70 $50 Less: Cost of goods sold $1,060 $1,500 Short-Term investments $35 $9 Less: Operating Expenses $105 $162 Accounts rec. 400 460 Less: Depreciation $85 $80 Inventory 490 556 Earnings before interest and taxes $1,330 $1,123 Total Current Assets $995 $1,075 Less: Interest paid $350 $380 Net fixed assets 1890 1,910 Taxable Income $980 $743 Less: Taxes (40%) $392 $297 Total assets $2,885 2,985 Net income $588 $446 Liabilities and Owner's Equity Dividends (45%) $265 $201 2018 2019 Additions to Retained Earnings $323 $245 Accounts payable $240 $210 Accruals $20 $20 Notes payable 65 74 Total Current Liabilities $325 $304 Long-term debt 884 1090 Total Liabilities $1,209 $1,394 Common stock 1341 1011 Retained earnings 335 $580 Total Equity 1676 $1,591 Total liab.& equity $2,885 $2,985 a. 68.24 days, 43.65 days b. 56.59 days, 58.60 days c. 44.62 days, 43.65 days d. 44.62 days, 58.60 day
What are the firm’s days’ sales outstanding for 2018 and 2019?
|
Income Statements ($ in millions) |
Balance Sheets ($ in millions) |
||||
|
|
2018 |
2019 |
Assets |
2018 |
2019 |
|
Sales Revenue |
$2,580 |
$2,865 |
Cash |
$70 |
$50 |
|
Less: Cost of goods sold |
$1,060 |
$1,500 |
Short-Term investments |
$35 |
$9 |
|
Less: Operating Expenses |
$105 |
$162 |
Accounts rec. |
400 |
460 |
|
Less: |
$85 |
$80 |
Inventory |
490 |
556 |
|
Earnings before interest and taxes |
$1,330 |
$1,123 |
Total Current Assets |
$995 |
$1,075 |
|
Less: Interest paid |
$350 |
$380 |
Net fixed assets |
1890 |
1,910 |
|
Taxable Income |
$980 |
$743 |
|
||
|
Less: Taxes (40%) |
$392 |
$297 |
Total assets |
$2,885 |
2,985 |
|
Net income |
$588 |
$446 |
Liabilities and Owner's Equity |
|
|
|
Dividends (45%) |
$265 |
$201 |
2018 |
2019 |
|
|
Additions to |
$323 |
$245 |
Accounts payable |
$240 |
$210 |
|
|
Accruals |
$20 |
$20 |
||
|
|
Notes payable |
65 |
74 |
||
|
|
Total Current Liabilities |
$325 |
$304 |
||
|
|
Long-term debt |
884 |
1090 |
||
|
|
Total Liabilities |
$1,209 |
$1,394 |
||
|
|
Common stock |
1341 |
1011 |
||
|
|
Retained earnings |
335 |
$580 |
||
|
|
Total Equity |
1676 |
$1,591 |
||
|
|
Total liab.& equity |
$2,885 |
$2,985 |
| a. |
68.24 days, 43.65 days |
|
| b. |
56.59 days, 58.60 days |
|
| c. |
44.62 days, 43.65 days |
|
| d. |
44.62 days, 58.60 days |
Days sales Outstanding(DSO)
= (Accounts Receivables/Revenue)*365
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