Question

Twist Corp. has a current accounts receivable balance of $317,615. Credit sales for the year just...

Twist Corp. has a current accounts receivable balance of $317,615. Credit sales for the year just ended were $2,947,600.
a.   What is the receivables turnover?
What is the days' sales in receivables?


Griffin’s Goat Farm, Inc., has sales of $659,000, costs of $235,000, depreciation expense of $40,000, interest expense of $29,000, and a tax rate of 24 percent. The firm paid out $111,000 in cash dividends, and has 40,000 shares of common stock outstanding.


a.   What is the earnings per share, or EPS, figure?
What is the dividends per share figure?

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Answer #1

Answer : 1

(a.) Calculation of Receivables Turnover

Receivables Turnover = Credit Sales / Accounts Receiveble

= 2,947,600 / 317,615

= 9.28041811627 or 9.28

(b.) Days' sales in receivables = 365 / Receivable Turnover

= 365 / 9.28041811627

= 39.33 days

Note : Assuming 365 days in a year

Answer 2.

Calculation of Earning Per share

Earning Per share = Net income available for equity shareholders / Number of Common stock outstanding

Net income available for equity shareholders = (Sales - Cost - Depreciation - Interest ) * ( 1 - Taxrate)

= (659,000 - 235,000 - 40,000 - 29,000) * (1 - 0.24)

= 355000 * 0.76

= 269800

Earning Per share = 269800 / 40000

= 6.745

Calculation of Dividend per share = Dividend / Number of Common stock outstanding

= 111,000 / 40000

= 2.775

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