410 83 307 $ 570 2008 2009 2008 2009 1,480 1,530 510 779 3,230 3,650 $5,770 $6,1

Question

410     

83     

307     

$ 570     

2008

2009

2008

2009

1,480     

1,530      

  510     

779    

3,230     

3,650      

$5,770     

$6,120      

$5,770    

$6,120    

What is the days' sales in receivables? (use 2009 values)

20.1

33.7

35.4

47.2

80.7

Galaxy United, Inc.
2009 Income Statement
($ in millions)   Net sales $8,550        Less: Cost of goods sold 7,180        Less: Depreciation

410     

  Earnings before interest and taxes 960        Less: Interest paid

83     

  Taxable Income 877        Less: Taxes

307     

  Net income

$ 570     

Explanation / Answer

CORRECT ANSWER = 33.7

Net sales = $8550

Account receivables = 790

Receivables turnover = sales/accounts receivable
receivables turnover = 8,550/790
receivables turnover = 10.82

Sales in receivables:-

days' sales in receivables = 365 days/10.82
days' sales in receivables = 33.73 days

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