How to calculate. "The days' sales in cash each year"

	Year 1 ($ thousands)	Year 2 ($ thousands)
Sales	343,306	482,657
Cost of goods sold	269,281	361,604
Net income	(175,134)	(405,509)
Cash flow from operations	(61,371)	(24,479)
Cash	343,180	271,372
Marketable securities	344,242	38,900
Accounts receivable	23,431	37,798
Inventories	6,733	74,106
Total current assets	717,586	422,176
Accounts payable	30,908	24,758
Accrued liabilities	46,790	126,851
Total current liabilities	77,698	151,609

Assuming a 365-day year for all calculations, compute the following:

The collection period each year is based on sales.

The inventory turnover and the payables period each year are based on the cost of goods sold.

The days’ sales in cash each year.

The gross margin and profit margin each year.

Answer rating: 100% (QA)

A Year 1 Collection period Sales 343 306 Account s rece ivable 23 431 Collection period 23 431 343 3... View the full answer