calculation of average number of days to sell inventory
Question
Bayside Inc.
2008 Income Statement
($ in thousands)
Net sales $ 5680
Less: Cost of goods sold 4060
Less: Depreciation 420
Earnings before interest and taxes 1200
Less: Interest paid 30
Taxable Income $ 1170
Less: Taxes 410
Net income $ 760
Bayside, Inc.
2007 and 2008 Balance Sheets
($ in thousands)
2007 2008 2007 2008
Cash $ 70 180 accounts payable $ 1350 $ 1170
Accounts rec. 980 840 long-term debt 720 500
Inventory 1560 1990 common stock 3200 3500
Total $ 2610 3010 retained earnings 940 1200
Net fixed assets 3600 3360
Total asset $ 6210 $ 6370 total liabilities & equity $ 6210 $ 6370
In 2008, how many days on average did it take Bayside to sell its inventory?
a. 126.1 days
b. 127.9 days
c. 153.8 days
d. 176.5 days
e. 178.9 days