1. Find Smith\'s days sales outstanding (DSO). Round to the nearest whole day. 4
ID: 2815427 • Letter: 1
Question
1. Find Smith's days sales outstanding (DSO). Round to the nearest whole day.
47
78
122
73
2. Calculate Smith's DPO. Round to the nearest whole day
3. How long does Smith wait from the time an inventory order is received until payment is received? Round intermediate steps and the final answer to the nearest whole day.
115
122
127
None of the above.
4. What is Smith's cash conversion period (CCP)? Round intermediate steps and your final answer to the nearest whole day
5.After negotiating with its customers, Smith was able in decrease its DSO by six days. What will be the resulting change in Smith's accounts receivable? Round intermediate steps to the nearest whole day and your final answer to the nearest whole dollar.
37
-119
111
-74
47
78
122
73
2. Calculate Smith's DPO. Round to the nearest whole day
3. How long does Smith wait from the time an inventory order is received until payment is received? Round intermediate steps and the final answer to the nearest whole day.
115
122
127
None of the above.
4. What is Smith's cash conversion period (CCP)? Round intermediate steps and your final answer to the nearest whole day
5.After negotiating with its customers, Smith was able in decrease its DSO by six days. What will be the resulting change in Smith's accounts receivable? Round intermediate steps to the nearest whole day and your final answer to the nearest whole dollar.
37
-119
111
-74
Use the following balance sheet and income statement for Smith Inc. to answer the next 5 questions. Liabilities and owners equity (Millions) Accounts Payable 900 Accrued operating expense 400 Notes Payable 3500 Long Term Debt 2000 Shareholders Equity 5300 Total 12100 Assets (Millions) Cash 4000 Inventory 600 Accounts Receivable 1500 Fixed assets 8000 Total 12100 Income Statement (Millions) Revenues 7000 COGS 4500 Operating Expenses 900 Depreciation 600 Interest 400 Taxes 500 Net Profit 100Explanation / Answer
Accounts receivables turnover ratio
sales/accounts receivables
7000/1500
4.666667
days sales outstanding
365/accounts receivables turnover ratio
365/4.6666
78
Accounts payables turnover ratio
cost of goods sold /accounts payables
4500/900
5
DPO
365/accounts payables turnover ratio
365/5
73
inventory turnover ratio
cost of goods sold /inventory
4500/600
7.5
days in inventory
365/inventory turnover ratio
365/7.5
48.66667
How long does Smith wait from the time an inventory order is received until payment is received
days sales outstanding + days in inventory
73 + 48.66
122
cash conversion cycle
days sales outstanding + days in inventory - DPO
78+48.66-73
54
days sales outstanding
365/accounts receivables turnover ratio
72 = 365/accounts receivable turnover ratio
accounts receivables = 365/72
5.069444
Accounts receivables turnover ratio
5.069 = 7000/ accounts receivables
accounts receivables = 7000/5.069
1380.943
decrease in accounts receivables
1380.943-1500
-119
Accounts receivables turnover ratio
sales/accounts receivables
7000/1500
4.666667
days sales outstanding
365/accounts receivables turnover ratio
365/4.6666
78
Accounts payables turnover ratio
cost of goods sold /accounts payables
4500/900
5
DPO
365/accounts payables turnover ratio
365/5
73
inventory turnover ratio
cost of goods sold /inventory
4500/600
7.5
days in inventory
365/inventory turnover ratio
365/7.5
48.66667
How long does Smith wait from the time an inventory order is received until payment is received
days sales outstanding + days in inventory
73 + 48.66
122
cash conversion cycle
days sales outstanding + days in inventory - DPO
78+48.66-73
54
days sales outstanding
365/accounts receivables turnover ratio
72 = 365/accounts receivable turnover ratio
accounts receivables = 365/72
5.069444
Accounts receivables turnover ratio
5.069 = 7000/ accounts receivables
accounts receivables = 7000/5.069
1380.943
decrease in accounts receivables
1380.943-1500
-119
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