PEV Dec 2008
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jackiepowell
Registered Posts: 72 Regular contributor ⭐
Couple of questions im lost on so i hope someone can help.
Task 2.1
What are the equations to work out. Return on Net Assets and Raw Materials Turnover in days??
I have tried all sorts of ways, i cant seem to work out the right answer.
Cheers
Jackie :crying:
Task 2.1
What are the equations to work out. Return on Net Assets and Raw Materials Turnover in days??
I have tried all sorts of ways, i cant seem to work out the right answer.
Cheers
Jackie :crying:
0
Comments

Stock turnover in days is
Closing stock / purchases of raw materials x 365 = x days
so for SP2000 60000/(54000060000) x 365 = 40.56 days
Return on Net Assets is to work out the % of Net Assets that is earned in Profit.
Profit / Net Assets x 100 = x%
414000 / 2014000 x 100 = 20.56%0 
Thankyou soooo much. Huge help thank you!!!0

garry_coombs wrote: »Stock turnover in days is
Closing stock / purchases of raw materials x 365 = x days
so for SP2000 60000/(54000060000) x 365 = 40.56 days
Return on Net Assets is to work out the % of Net Assets that is earned in Profit.
Profit / Net Assets x 100 = x%
414000 / 2014000 x 100 = 20.56%
was going to post another question but found the answer here
thanks Garry
Tracy0 
garry_coombs wrote: »Stock turnover in days is
Closing stock / purchases of raw materials x 365 = x days
so for SP2000 60000/(54000060000) x 365 = 40.56 days
I have worked out this formula given by Garry, but I get 45.63 days.
I've tried the same method with SP3000 and get 91.25 days
Can someone tell me what I'm doing wrong? :001_unsure:
Tube0 
I haven't looked at the paper but the answer is worked out on the following:
60,000 / 540,000 x 365 = 40.56 days
As I said, this is an answer to how 40.56 days was worked out, not an answer to the original question.
:001_smile:0 
Thanks for the reply Lou. I couldn't work this one out. I kept on getting a different answer than the one printed in the AAT exam answers paper.
I'm still a bit puzzled though. Is the stock turnover in days worked out differently for raw materials? In my BPP book it mentions Average Stock/Cost of Sales x 365 days but does not mention the type of stock. :001_unsure:
In this question, the Direct Materials figure is being used instead of the Cost of Sales figure.
Thanks
Tube0
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