Homework Answers
| Average collection period of firm (365*268700/1034550): | 95 | days | |||||
| Indutry Average | 65 | days | |||||
| Savings in Accounts receivable as investmentt for | 30 | days | |||||
| Interest cost of carrying the Accounts receivable | 9% | ||||||
| Therefore, Savings in Interest cost of Accounts receivable | 1988 | ||||||
| (268700 *9% *30/365) | |||||||
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Question 46 (3 points) If the industry average days sales outstanding is 65 days and a...
if the industry average days sales outstanding is 65 days and a firm with sales of...
if the industry average days sales outstanding is 65 days and a firm with sales of $1,034,550 has receivables of $268.700, how much in interest expense could the firm save if the receivables turn over as quickly as the industry average and the cost of carrying the receivables is 9%? TTTT Paragraph Arial 3 (12pt) E- T. %D0Q TT, fx Mashups - © - 3.
Chapter 14 Practice Test Question 16 13 Ratios Using the firm's data provided below explain why...
Chapter 14 Practice Test Question 16 13 Ratios Using the firm's data provided below explain why the firm's ROA is less than the industry average of 59% given that the industry average asset turnover is 1.22 4 points $150 (mil) 70 15 $125 30 $ 35 Sales Skipped EBIT Interest Expense Assets Equity еВоok Net Profit Print Multiple Choice References The firm uses less debt than the industry. The firm is not generating enough sales from assets and has too...
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Which of the following is not an asset management ratio? A days sales outstanding ratio A fixed asset turnover ratio A price-earnings ratio The average collection period Nikola Motors has a quick ratio of 2.00; $38,250 in cash; $21,250 in accounts receivable; some inventory; total current assets of $85,000; and total current liabilities of $29,750. In its most recent annual report, Nikola reported annual sales of $100,000 and a cost of goods sold equal to 65% of annual sales. How...
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9. Days sales outstanding Thatherton Fuels's CFO has decided to take a closer look at the company's credit policy. Thatherton Fuels has annual sales of $396.3 million, and it currently has an accounts receivable balance of $45.4 million. The first step in analyzing the firm's credit policy is to determine its days sales outstanding (DSO). Based on this information, what is Thatherton Fuels's DSO? (Use 365 days as the length of a year in all calculations.) 37.6 days 33.4 days...
Question 20 4 points Save Answer Your firm has an average collection period of 38 days....
Question 20 4 points Save Answer Your firm has an average collection period of 38 days. Current practice is to factor all receivables immediately at a discount rate of 4 percent. Assume that default is extremely unlikely. What is the effective cost of borrowing? A. 37.78 percent B. 28.79 percent c. 31.87 percent O d. 40.97 percent E. 48.01 percent
Shine's has 100,000 common shares outstanding during 2016, Requirements inventory turnover, days' sales in inventory, and...
Shine's has 100,000 common shares outstanding during 2016, Requirements inventory turnover, days' sales in inventory, and gross profit percentage for Shine's Companies for 2016. 2. Compute days' sales in receivables during 2016. Round dollar amounts to three decimal places. Assume all sales were on account. 3. What do these ratios say about Shine's Companies' ability to sell inventory and collect receivables? Requirement 1. Compute the inventory turnover, days' sales in inventory, and gross profit percentage for Shine's Companies for 2016...
QUESTION 12 The days sales outstanding tells us how long it takes, on average, to collect...
QUESTION 12 The days sales outstanding tells us how long it takes, on average, to collect after a sale is made. The DSO can be compared with the firm's credit terms to get an idea of whether customers are paying on time. True False QUESTION 1 Other things held constant, the more debt a firm uses, the lower its operating margin will be. True False
Ingraham Inc, currently has $885,000 in accounts receivable, and its days sales outstanding (DSO) is 65 days
DSO AND ACCOUNTS RECEIVABLE Ingraham Inc, currently has $885,000 in accounts receivable, and its days sales outstanding (DSO) is 65 days. It wants to reduce its DSO to 35 days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by 15%. What will be the level of accounts receivable following the change? Assume a 365-day year. Do not round intermediate calculations. Round your answer to the nearest...
Ingraham Inc. currently has $800,000 in accounts receivable, and its days sales outstanding (DSO) is 65...
Ingraham Inc. currently has $800,000 in accounts receivable, and its days sales outstanding (DSO) is 65 days. It wants to reduce its DSO to 30 days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by 25%. What will be the level of accounts receivable following the change? Assume a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent.
Question 3. The Timber Ridge Company has the following relationships: Sales/Total assets = 3.80; ROA =...
Question 3. The Timber Ridge Company has the following relationships: Sales/Total assets = 3.80; ROA = 0.0980 What is Timber Ridge’s net profit margin? Round to 3 decimal places. Question 5 Archware Systems has total assets of $35.594 billion, total debt of $9.678 billion, and net sales of $23.720 billion. Their net profit margin for the year was 0.22, while the operating profit margin was 30 percent. What is Archware’s net income? (Answer needs to be stated in billions. For...
if the industry average days sales outstanding is 65 days and a firm with sales of $1,034,550 has receivables of $268.700, how much in interest expense could the firm save if the receivables turn over as quickly as the industry average and the cost of carrying the receivables is 9%? TTTT Paragraph Arial 3 (12pt) E- T. %D0Q TT, fx Mashups - © - 3.
Chapter 14 Practice Test Question 16 13 Ratios Using the firm's data provided below explain why the firm's ROA is less than the industry average of 59% given that the industry average asset turnover is 1.22 4 points $150 (mil) 70 15 $125 30 $ 35 Sales Skipped EBIT Interest Expense Assets Equity еВоok Net Profit Print Multiple Choice References The firm uses less debt than the industry. The firm is not generating enough sales from assets and has too...
9. Days sales outstanding Thatherton Fuels's CFO has decided to take a closer look at the company's credit policy. Thatherton Fuels has annual sales of $396.3 million, and it currently has an accounts receivable balance of $45.4 million. The first step in analyzing the firm's credit policy is to determine its days sales outstanding (DSO). Based on this information, what is Thatherton Fuels's DSO? (Use 365 days as the length of a year in all calculations.) 37.6 days 33.4 days...
Question 20 4 points Save Answer Your firm has an average collection period of 38 days. Current practice is to factor all receivables immediately at a discount rate of 4 percent. Assume that default is extremely unlikely. What is the effective cost of borrowing? A. 37.78 percent B. 28.79 percent c. 31.87 percent O d. 40.97 percent E. 48.01 percent
Shine's has 100,000 common shares outstanding during 2016, Requirements inventory turnover, days' sales in inventory, and gross profit percentage for Shine's Companies for 2016. 2. Compute days' sales in receivables during 2016. Round dollar amounts to three decimal places. Assume all sales were on account. 3. What do these ratios say about Shine's Companies' ability to sell inventory and collect receivables? Requirement 1. Compute the inventory turnover, days' sales in inventory, and gross profit percentage for Shine's Companies for 2016...
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