Question 1

**Section B - Case 3**

*OmniCart is an e-commerce retailer. The following financial data is available for the years ended 31 December:

**20X5:**
Revenue: $8,000,000
Cost of Sales: $5,000,000
Inventory: $500,000
Trade Receivables: $800,000
Trade Payables: $600,000

**20X4:**
Revenue: $6,000,000
Cost of Sales: $3,600,000
Inventory: $400,000
Trade Receivables: $500,000
Trade Payables: $450,000

Assume a 365-day year for all calculations.*

**Question:**
What is OmniCart's inventory turnover period (in days) for the year ended 31 December 20X5?

Accepted Answer

Use the formula: (Inventory / Cost of Sales) x 365.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Using Revenue instead of Cost of Sales in the denominator.

How to approach this question

Full Answer