Muskoka Timber Ltd., 2026 (CAD thousands): net income 210; average total assets 1,750; revenue 2,800 (all on credit); average accounts receivable 280; cost of goods sold 1,680; average inventory 420; average accounts payable 210. Using the course conventions (average balances; 365-day year; receivables on credit sales, inventory and payables on COGS), compute ROA as a percentage to two decimals, asset turnover to two decimals, the three days ratios and the cash conversion cycle to one decimal.
Muskoka Timber Ltd., 2026 (CAD thousands): net income 210; average total assets 1,750; revenue 2,800 (all on credit); average accounts receivable 280; cost of goods sold 1,680; average inventory 420; average accounts payable 210. Using the course conventions (average balances; 365-day year; receivables on credit sales, inventory and payables on COGS), compute ROA as a percentage to two decimals, asset turnover to two decimals, the three days ratios and the cash conversion cycle to one decimal.
Answer
ROA % → 12 · Asset turnover → 1.6 · Days receivable → 36.5 · Days inventory → 91.25 · Days payable → 45.625 · Cash conversion cycle (days) → 82.125
Cells - ROA % · ±0.05 - Asset turnover · ±0.01 - Days receivable · ±0.1 - Days inventory · ±0.1 - Days payable · ±0.1 - Cash conversion cycle (days) · ±0.1 ROA = 210 ÷ 1,750 = 12.00 %. Asset turnover = 2,800 ÷ 1,750 = 1.60. Days receivable = 280 ÷ 2,800 × 365 = 36.5. Days inventory = 420 ÷ 1,680 × 365 = 91.3 (91.25). Days payable = 210 ÷ 1,680 × 365 = 45.6 (45.625). CCC = 91.25 + 36.5 − 45.625 = 82.1 days — payables SUBTRACTED.
Modules 8–13