How do you calculate Sales Revenue and Cost of Sales?

Lisa_Carroll

Hi

I feel like I'm having one of those moments where my brain just isn't working! I'm doing the Cash Management 2013 Practice Assessment 2, task 7.

Task 7b) Link to image of question: https://flickr.com/photos/124836893@N07/15666766747/

Gross Profit: £647,875
Trade Receivables: £450,000
Trade Payables: £316,050
Trade Receivables collection period in days: 90
Inventory holding period in days: 60

I need to find the answers to:
Sales Revenue
Cost of Sales
Inventories level in SFP
Trade payables payment period in days

The answers are as follows:
Sales Revenue 1,825,000
Cost of Sales 1,177,125
Inventories level in SFP 193,500
Trade payables payment period in days 98

Task 7c)

"The cash operating cycle for the company is ..... days"

The answer is 52 days, but how do you reach this?

Lisa_Carroll

Nevermind! Solved it! Not sure how to delete discussions though

lauriemarks89

Hi Lisa, Im stuck on the exact same question, and my brain has also stopped working

Do you mind telling me how you got the figures for;

Sales Revenue
Cost of Sales
Inventories level in SFP
Trade payables payment period in days

Im lost! Thanks

Saz123

Hi, any chance either of you could let me know how you worked it out please? I'm also stuck on this question and it's driving me mad! I realise it was a good few months ago since you posted but it's worth a shot! Thank you

crispy

Hello,

Bored at work so thought would have a go to get the old brain moving

Sales Revenue: 450,000/90 * 365 = 1,825,000
Cost Of Sales: 1,825,000 - 647,875 = 1,177,125
Inventories: 1,177,125/365 * 60 = 193,500
Payables Days: 316,050 / 1,177,125 * 365 = 98

Inventories Days: 60
Receivables days: 90
Less: Payables Days: (98)
Cash Cycle: 52

Ta Dahh If this has helped then I have done my good deed for the day