Charlene Ashley Cu

FNSTMT1 - V24

a. Inventory Turnover Ratio

COGS
Average Inventory

5,292,211,051
(1,372,727,670 + 2,393,629,841) / 2

2.810254223
inventory turnover is relatively low so they may have inventory that is already expired before sold. competition including 7/11 and uncle johns may play a role in this.

b. Average Age of Inventory

365 Days
Inventory Turnover

365 Days
2.810254223

129.8814879

c. Average Collection Period

AR
Ave. sales per day

Annual Sales * Assumption: use sale of goods

Ave. sales per day =
365

6,328,567,786
Ave. sales per day =
365

Ave. sales per day = 17,338,541.88

146646050
17,338,541.88

8.457807526
with short average collection period, merry mart is open to short term investments.

d. Average Payment Period, assuming that purchases are equal to 70% COGS
AP
Average Credit Purchases per day

Annual Credit Purchases

Average Credit Purchases per day =
365 Days

Average Credit Purchases per day = (5292211051 * 0.7) / 365

Average Credit Purchases per day = 10149445.85

1,262,654,570
10149445.85

124.4062571

e. Total Asset Turnover

Sales
Average Total Assets

6,328,567,786
(8,434,608,454 + 6,492,458,225)/2

0.8479318706
f. Fixed Asset Turnover
Sales
Average Total Fixed Assets * Assumption: use PPE account only for fixed asset

6,328,567,786
(2624001013+1718685658) / 2

2.914586414
fixed assets are high so it can be said that its effectively being used to generate sales.
merry mart heavily relies in inventory to generate sales.
also, merry mart is still able to generate sales despite having large amounts of fixed assets (as seen in FS).
overall, the company has to look more into its relationship with suppliers and also ensure that they catch up with the competition.