The Metro 2021 income statement follows.

Use the preceding income statement and the balance sheet from S12-6 to calculate the following:

a. Metro’s rate of inventory turnover and days’ inventory outstanding for 2021.

b. Days’ sales in average receivables (days’ sales outstanding) during 2021 (round dollar amounts to one decimal place). Assume all sales are made on account.

c. Accounts payable turnover and days’ payables outstanding for 2021. For this purpose, assume that the impact of inventories on cost of goods sold is immaterial, allowing you to use cost of goods sold rather than purchases in your computations.

d. Length of cash conversion cycle in days for 2021.

Do these measures look strong or weak? Give the reason for your answer.  

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A1 5 6 7 Metro Corporation Statements of Income (Adapted) Year Ended December 31, 2021 and 2020 1 2 (Dollar amounts in millions) 3 Net revenues 4 Cost of goods sold Gross profit Selling, general and administrative expenses Income from operations 8 Interest expense, net 9 10 11 Net income 12 Income before income taxe: Provision for income taxes B 2021 $ 9,500 4,589 4,911 3,607 1,304 204 1,100 389 $ 711 2020 $9,319 4,851 4,468 3,456 1,012 178 834 251 $ 583