Networking

Systems earned sales revenue of

68

million in

20X8.

Cost of goods sold was

35

million, and profit for the year reached

7 million,

Networking's

highest ever. Total current assets included inventories of

6

million at 31 December

20X8.

Last year's closing inventories figure was

8

million. The managers of

Networking

Systems need to know the company's gross profit percentage and average inventories turnover period for

20X8.

Question content area bottom

Part 1

Compute

Networking's

gross profit percentage. (Enter your answers as integers.)

First, determine the formula for gross profit percentage. Next, enter the amounts needed to make the calculation:

Gross profit percentage

=

=

=

Part 2

Now you can complete the equation.

Networking's

gross profit percentage is:

(Round your percentage to one decimal place.)

Gross profit percentage

=

enter your response here%

Part 3

Next, compute

Networking's

average inventories turnover period (in days) for

20X8.

First, determine the equation for average inventories turnover period. Next, enter the amounts needed to make the calculation:

(Enter the opening inventories first in your calculation.)

Average inventories turnover period

=

=

(		+		)			x 365	=

Part 4

Now you can complete the equation.

Networking's

average inventories turnover period for

20X8

is: (to the nearest complete day)

Average inventories turnover period

=

days

Part 5

If the company's average inventories turnover period for

20X7

was 10 days more than in

20X8,

which one of the following is certain?

A.

The company has sold fewer goods in 20X8

B.

The company has sold its goods faster in 20X8

C.

The company has sold its goods slower in 20X8

D.

The company has sold more goods in