Exercise: Calculating the Full Average Maturity Period for a
Commercial company
XYZ Inc. provides the following financial information for the year:
1. Beginning Inventory: $70,000
2. Ending Inventory: $90,000
3. Cost of Goods Sold (COGS): $400,000
4. Beginning Accounts Receivable: $50,000
5. Ending Accounts Receivable: $70,000
6. Total Credit Sales: $500,000
7. Beginning Accounts Payable: $40,000
8. Ending Accounts Payable: $60,000
9. Days in the Year: 365
Using this information:
1. Calculate the average maturity period.
2. Interpret the results to understand XYZ Inc.’s efficiency in managing its
working capital.
Exercise: Calculating the Full Average Maturity Period for an
Industrial Company
ABC Manufacturing Inc., una empresa industrial, ha proporcionado la siguiente
información para el año fiscal:
1. Beginning Raw Materials Inventory: $30,000
2. Ending Raw Materials Inventory: $50,000
3. Beginning Work-in-Process (WIP) Inventory: $40,000
4. Ending Work-in-Process (WIP) Inventory: $60,000
5. Beginning Finished Goods Inventory: $70,000
6. Ending Finished Goods Inventory: $90,000
7. Cost of Raw Materials Used: $200,000
8. Cost of Goods Manufactured (COGM): $400,000
9. Total Cost of Goods Sold (COGS): $600,000
10. Beginning Accounts Receivable: $60,000
11. Ending Accounts Receivable: $80,000
12. Total Credit Sales: $700,000
13. Beginning Accounts Payable: $50,000
14. Ending Accounts Payable: $70,000
15. Days in the Year: 365
Using this information:
1. Calculate average maturity period.
2. Interpret the results to assess how efficiently ABC Manufacturing Inc. is
managing its working capital.