Help Cash management practise paper 2 question 7!
lauriemarks89
Registered Posts: 2
Hi
Please help I'm stuck
I've been given these figures:
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
And 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
But I have no idea what I need to do to get to these answers.
How am I meant to work out the cost of sales without the closing and opening inventory and the purchases figures?
Am I missing something very obvious!?
Help would be much appreciated
Please help I'm stuck
I've been given these figures:
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
And 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
But I have no idea what I need to do to get to these answers.
How am I meant to work out the cost of sales without the closing and opening inventory and the purchases figures?
Am I missing something very obvious!?
Help would be much appreciated
1
Comments

Hi
You have to work it out backwards.
To get the sales Figure you have:
receivables/sales x 365 =90
To find the Sales figure
Sales ?= 365/90 x 450,000 (receivables)= 1825000
COS = SalesGross Profit
COS= 1825000647875= 1177125
Inventory/1177125 (COS) x365 =60
To find the Inventory level figure
?inv= 60/365 x1177125 = 193500
Now you have all the figures you can work out the trade payables period in days
Payables/COS x365
316050/1177125 x365 =98 days
Part C
cash Operating Cycle
90+6098= 52
How did you get on with the average trend as 36 on Task 2, I worked all the figures out the same but got 30 as the average I must be missing something1 
Help Please i am trying to get onto the sample assessments and through google chrome it comes up with a thick grey line at the bottom where start assessment is  have tried making the screen smaller and still doesnt work it worked in ie10 but keeps dropping off and now wont let me on at all.
_________
kaleem0 
Anyone know how to do task 3b and task 1a from aat practice 2013?0
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