Help Cash management practise paper 2 question 7!

lauriemarks89

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

ellie72

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 = Sales-Gross Profit
COS= 1825000-647875= 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+60-98= 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 something

Salwa

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.



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kaleem

j1994

Anyone know how to do task 3b and task 1a from aat practice 2013?