Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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?

  1. The control of inventory has improved between 2019 and 2020.
  2. Increasing creditor balances each year is an indicator of poor control of working capital management.
  3. Creditor days have decreased by approximately 5 days between 2019 and 2020.
  4. Debtors collection days have increased between 2019 to 2020.

image text in transcribedimage text in transcribedimage text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Plus

Authors: Robert Libby, Patricia Libby, Daniel Short

8th Edition

1259116832, 9781259116834

More Books

Students also viewed these Accounting questions

Question

How would you define the zero vector 0(vector)?

Answered: 1 week ago