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9.1.1 Lecture_17_Solution_2009

9.1.1 Lecture_17_Solution_2009 - FINC 202(2009 Lecture 17...

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1 FINC 202 (2009) Lecture 17 Solutions Note 1: final two slides are corrected from lecture. Difference between old CA and new CA is $390,000 (not $350,000). This makes ROA NEW 12.16% (not 11.90%) Note 2: first three problems (D’Leon) are included this slide-set. Note 3: the solutions are therefore re-numbered 1 to 5 (no longer 1, 2, 3, 1, 2 !)
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2 Solution 1: D’Leon’s ICP 360 1,716,480 5,728,000 360 107.8793 108 Inventory ICP COGS days = = =
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3 Solution 2: D’Leon’s DSO 360 878,000 7,035,600 360 44.92581 45 Receivables DSO Credit Sales days = = =
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4 Solution 3: D’Leon’s DSO if 80% of sales are on credit ( 29 ( 29 ( 29 ( 29 ( 29 ( 29 360 878,000 0.8 7,035,600 360 56.15726 56 0.8 56.15726 0.2 0 44.92581 CREDIT SALES ONLY Receivables DSO Credit Sales days But days as previously = = = + =
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5 Solution 4 A 360-day year is used in this solution (a) 3,600,000 540,000 6.67 COGS Inventory Turnover Inventory = = = ×
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6 (b) 540,000 3,600,000 360 540,000 10,000 54 Inventory ICP Average Daily COGS days = = = =
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7 (c) $700,000 $4,500,000 360 $700,000 $12,500 56 : Receivables DSO Daily Credit Sales days NB DSO ACP = =
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