Introduction to Supply Chain Management
Homework 1
Problem 1: Management Ratios (10 points)
You are CEO of a fast food restaurant and have just received the financial statements for the year. Use this data to calculate the values in parts a-e below.
| Total Revenue | $21,025,200 |
| Annual Credit Sales | $9,890,500 |
| Cost of Goods Sold | $10,027,700 |
| Total Operating Expenses | $2,200,200 |
| Interest Expense | $981,200 |
| Income Tax Expense | $1,891,800 |
| Net Income | $5,924,300 |
| Total Cash | $866,000 |
| Average Accounts Receivable | $2,441,500 |
| Average Inventory | $51,100 |
| Total Assets | $32,811,200 |
| Total Liabilities | $39,069,600 |
| Total Stockholders’ Equity | -$6,258,400 |
| Days Sales Outstanding | 33 days |
| Payables Period | 30 days |
- Calculate the receivables turnover ratio (2 points).
- Calculate the inventory turnover (2 points).
- Calculate the asset turnover (2 points).
- Calculate the days of supply (2 points).
- Calculate the cash conversion cycle (Hint: use your answer from part d for the “Days inventory”) (2 points).