Skullcandy designs, markets, and distributes audio and gaming headphones, earbuds, and speakers. Assume that last year Skullcandy reported cost of goods sold of $158 million. Assume that this year cost of goods was $117 million. Accounts payable was $23 million at the end of last year and $17 million at the end of this year. Required:
1. For this year, compute the average number of days that Skullcandy’s accounts payable are outstanding.
2. Assume Skullcandy’s closest competitor reports that the average number of days that its accounts payable are outstanding is 30. Comment on Skullcandy’s number relative to its competitor’s number.