Question

	Large Company
Net sales	$                 188,800
Cost of sales	$                   90,360
Gross profit	$                   98,440
Selling, general, and administrative expenses	$                   91,630
Operating income	$                     3,510
Net income	$                     1,000
Cash and cash equivalents	$                     1,710
Net receivables	$                           -
Inventories	$                   76,750
Total current assets	$                   83,720
Property and equipment	$                   10,890
Other assets	$                   24,120
Total assets	$                 118,730
Accounts payable	$                   22,060
Stockholder equity	$                   18,530

What is the value of C2C in weeks? (Choose the closest)

64.20

-5.82

31.47

-12.81

Answer 1

C2C is measured as A/R + Inv – A/P

The C2C can be calculated using the following component:

1. Account Receivable Turnover in Days. Measures the average number of days from the

sale of goods to collection of resulting receivables. It is obtained by the following formula:

(Account Receivable/Sales) * 365

In the question it is 0.

2. Inventory Turnover. Measures the length of time on average between the acquisition

and sale of merchandise. It is obtained by the following formula: (Inventory/COGS) * 365

=(76,750/90,360) * 365

= 310

3. Payable Turnover in Days. Measures the average length of time between purchase of

goods and payment for them. It is obtained by the following formula: (Accounts

Payable/COGS) * 365

=(22,060/90,360) * 365

= 89

The C2C is 310-89 = 221/7 in weeks

= 31.57 and the answer closes is 31.47