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?

(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

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