A firm has sales of $26 million, and 20 percent of the sales are for cash. The year-end accounts receivable balance is $160,000,
What is the average collection period? (Use a 360-day year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Average collection period = _______ days
First we will calculate the accounts receivables turnover ratio as per below:
Accounts receivables turnover ratio = Credit sales / Accounts receivables
Credit sales = 80% * $2600000 = $2080000
Accounts receivables = $160000
Putting the values in the above formula, we get,
Accounts receivables turnover ratio = $2080000 / $160000
Accounts receivables turnover ratio = 13
Now, we will calculate the average collection period as per below:
Average collection period = 365 / Accounts receivable turnover ratio
Putting the values in the above formula, we get,
Average collection period = 360 / 13
Average collection period = 27.69 days
A firm has sales of $26 million, and 20 percent of the sales are for cash
A firm has sales of $1.9 million, and 15 percent of the sales are for cash. The year-end accounts receivable balance is $210,000. What is the average collection period? (Use a 360-day year. Do not round intermediate calculations. Round your final answer to 2 decimal places.) Average collection period __________ days?
A firm has projected next year's sales at $678 million of which 60 percent will be for cash, and 40 percent will be on credit. Forecast the year-end accounts receivable balance if the firm expects an average collection period of 45 days (assume a 360-day year and calculate using year-end balance).
A firm has sales of $2.6 million, and 25 percent of the sales are for cash. The year-end accounts receivable balance is $195,000. What is the average collection period?
Oral Roberts Dental Supplies has annual sales of $6,435,000. Eighty percent are on credit. The firm has $800,800 in accounts receivable. Compute the value of the average collection period. (Do not round intermediate calculations. Use a 360-day year.) Average collection period ____________ days
Oral Roberts Dental Supplies has annual sales of $6,615,000. Eighty percent are on credit. The firm has $882,000 in accounts receivable. Compute the value of the average collection period. (Do not round intermediate calculations. Use a 360-day year.) Average collection period= _______days
(Efficiency analysis) The Brenmar Sales Company had a gross profit margin (gross profits divided by÷sales) 26 percent and sales of $ 9.9 million last year. 78 percent of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal $1.8 million, its current liabilities equal $ 300,700, and it has $100,100 in cash plus marketable securities.a. If Brenmar's accounts receivable equal $563,200, what is its average collection period?b. If Brenmar reduces its average collection...
Annual credit sales of Nadak Co. total $336.6 million. The firm gives a 175% cash discount for payment within 10 days of the invoice date; 80% of Nadak's accounts receivable are paid within the discount period. Required: a. What is the total amount of cash discounts allowed in a year? (Enter your answer in millions rounded to 2 decimal places.) Total amount million b. Calculate the approximate annual rate of return on investment that Nadak Co.'s cash discount terms represent...
Annual credit sales of Nadak Co. total $336.6 million. The firm gives a 1.75% cash discount for payment within 10 days of the invoice date: 80% of Nadak's accounts receivable are paid within the discount period. Required: a. What is the total amount of cash discounts allowed in a year? (Enter your answer in millions rounded to 2 decimal places.) Answer is complete and correct. $ 4.71 million amount b. Calculate the approximate annual rate of return on investment that...
Shelton, Inc., has sales of $20 million, total assets of $17.6 milion, and total debt of $6.7 million. Assume the profit margin is 8 percent. What is the company's net income? (Do not round intermediate calculations. Enter your answer in dollars not in millions, e.g., 1,234,567.) Net income $ 1,600,000 What is the companys ROA? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) ROA 9.09 % What is the company's...
(Efficiency analysis) The Brenmar Sales Company had a gross profit margin (gross profits ÷ sales) of 26 percent and sales of $8.3 million last year. 70 percent of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal $1.4 million, its current liabilities equal $295,500, and it has $109,900 in cash plus marketable securities. a. If Brenmar's accounts receivable equal $561,700, what is its average collection period? b. If Brenmar reduces its average collection period to...