Use the Allstott 2020 income statement that follows and the balance sheet from exercise 10-6 to compute the following:

a. Allstott's rate of inventory turnover and days inventory outstanding for 2020

b. Days' sales in average receivables (days sales outstanding) during 2020 (round dollar amounts to one decimal place)

c. Accounts payable turnover and days' payables outstanding

d. Length of cash conversion cycle in days Do these measures look strong or weak? Give the reason for your answer.

Transcribed Image Text:

A Allstott, Inc. Statements of Income (Adapted) Year Ended December 31, 2020 and 2019 B 2 (dollar amounts in millions) 2020 2019 3 Revenues $9,500 $ 9,309 4 Expenses: 5 Food and paper (Cost of goods sold) 2,509 2,644 6 Payroll and employee benefits 2,138 2,211 7 Occupancy and other operating expenses 2,413 2,375 8 General and administrative expenses 1,217 1,148 9 Interest expense 184 117 10 Other expense (income), net 19 (34) 11 Income before income taxes 1,020 848 12 Income tax experise 285 267 13 Net income $ 735 $ 581 14 D