Stock Turnover
Debtor Days
Creditors Days
Insolvency vs. Bankruptcy
100
Cost of sales/Average Stock
What is the Stock Turnover equation?
100
The formula for debtor days is _____/Revenue X 365, What is the blank?
What is Accounts receivable
100
____/Cost of sales x 365 = Creditor days
What is Creditors?
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100
____ describes when a person or company cannot pay their debts when they are due
What is insolvency?
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200
A bakery with a cost of goods sold of $500,000 and an average inventory of $100,000 has his stock turnover ratio.
What is 5?
200
If Debtor days are 45, how long does the company take, on average, to collect payments from customers?
What is 45 days
200
If a company's creditor days ratio has a value of 60, it means it takes this long, on average, to pay suppliers.
What is 60 days?
200
____ is the legal process that is initiated when an individual or business formally declares they cannot meet their financial obligations.
What is Bankruptcy
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300
If a Amazon's stock turnover ratio is 10, it means inventory is sold and replaced this many times a year
What is 10 times?
300
A company with increasing debtor days might face this financial challenge
What is cash flow problems
300
A business with excessively high creditor days risks damaging these relationships.
What are supplier relationships?
300
A retailer owes $100,000 to creditors and only has $50,000 in assets, but it is still attempting to operate without any legal fillings.
What is insolvency?
400
A business has an average stock cost of $20,000 and cost of sales value of $100,000, meaning it replenishes its stock every ____ day.
What is every 73rd day?
400
Reducing debtor days can be achieved by implementing this type of payment term incentive
What is early payment discounts
400
Creditor days can be reduced by renegotiating this with suppliers.
What are shorter payment terms?
400
A business goes to court to declare that they cannot settle its debts even with selling all its assets.
What is bankruptcy?
500
A company with a cost of goods sold of $1,200,000 a stock turnover ratio of 8, and a ____ amount of average inventory.
What is $150,000
500
If accounts receivable is 50,000 dollars and Revenue is 500,000 dollars, what are the debtor days?
What is 36.5 days
(calculation: 50,000/500,0000 x 365)
500
A business takes 41 days on average to pay its suppliers with the cost of sales value being $2,000,000. This means that the business's creditor value is ____.
What is $225,000
500
Jack Moscovitz officially files with the courts to liquidate his assets and distribute the cash to its creditors.
What is bankruptcy?