1. Find XYZ\'s NWC. 2. How long, on average, does it take for XYZ to sell invent
ID: 2820602 • Letter: 1
Question
1. Find XYZ's NWC.
2. How long, on average, does it take for XYZ to sell inventory items after acquiring them? Round intermediate steps to four decimals and your final answer to the nearest whole day.
Use the follwoing financial statements for XYZ Corp. to answer the next two questions Assets Cash 1800 Inventory 400 Accounts Receivable 1500 Fixed assets 1000 Liabilities and owners equity Accounts Payable 500 Accrued operating expense 100 Notes Payable 800 Long Term Debt 500 Shareholders Equity 2800 Total 4700 Total 4700 Income Statement Revenues 3000 COGS 2700 Operating Expenses 100 Depreciation 20 Interest 10 Taxes 25 Net Profit 145Explanation / Answer
Answer 1.
Current Assets = Cash + Inventory + Accounts Receivable
Current Assets = 1,800 + 400 + 1,500
Current Assets = 3,700
Current Liabilities = Accounts Payable + Accrued Operating Expense + Notes Payable
Current Liabilities = 500 + 100 + 800
Current Liabilities = 1,400
Net Working Capital = Current Assets - Current Liabilities
Net Working Capital = 3,700 - 1,400
Net Working Capital = 2,300
Answer 2.
Inventory Turnover = Cost of Goods Sold / Inventory
Inventory Turnover = 2,700 / 400
Inventory Turnover = 6.75
Days to Sell Inventory = 365 / Inventory Turnover
Days to Sell Inventory = 365 / 6.75
Days to Sell Inventory = 54 days
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