Nugent, Inc., has a gross profit margin of 31.7 percent on sales of $9,865,214 and total assets

Question:

Nugent, Inc., has a gross profit margin of 31.7 percent on sales of $9,865,214 and total assets of $7,125,852. The company has a current ratio of 2.7 times, accounts receivable of $1,715,363, cash and marketable securities of $315,488, and current liabilities of $870,938.

a. What is Nugent’s total current assets?

b. How much inventory does the firm have? What is the inventory turnover ratio?

c. What is Nugent’s days’ sales outstanding?

d. If management wants to set a target DSO of 30 days, what should Nugent’s accounts receivable be?

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...