# PEV Dec 2008

Couple of questions im lost on so i hope someone can help.

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:

• Stock turnover in days is

Closing stock / purchases of raw materials x 365 = x days

so for SP2000 60000/(540000-60000) 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%
• Thankyou soooo much. Huge help thank you!!!
• Stock turnover in days is

Closing stock / purchases of raw materials x 365 = x days

so for SP2000 60000/(540000-60000) 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

Tracy
• Stock turnover in days is

Closing stock / purchases of raw materials x 365 = x days

so for SP2000 60000/(540000-60000) 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:

Tube
• 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:
• 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
Tube