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Julia Limited retails homewares, it has six stores in Sydney. 80% of sales are cash sales. The following information relates to actual results for 31.12.2018,
Julia Limited retails homewares, it has six stores in Sydney. 80% of sales are cash sales. The following information relates to actual results for 31.12.2018, 31.12.2019 and 31.12.2020:
2018 $'000 | 2019 $'000 | 2020 $'000 | |
Selected financial performance items: | |||
Total sales | 13,800 | 16,080 | 25,366 |
Cost of goods sold (COGS) | 6,370 | 7,370 | 11,922 |
Gross Margin % | 54% | 54% | 53% |
Selected balance sheet items: | |||
Inventory | 1,274 | 1,322 | 6,881 |
Debtors | 84 | 121 | 277 |
Creditors | (184) | (220) | (298) |
Net Working Capital | 1,174 | 1,223 | 6,860 |
Which of the following statements are correct?
- The control of inventory has improved between 2019 and 2020.
- Increasing creditor balances each year is an indicator of poor control of working capital management.
- Creditor days have decreased by approximately 5 days between 2019 and 2020.
- Debtors collection days have increased between 2019 to 2020.
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