A company’s credit policy is reflected in this ratio
Answer is Receivable Turnover Ratio.
It is an efficiency measurement that helps the top authority to analyze its receivable by using its credit policy.
Receevable Turnover Ratio = Net Credit sales /Average Account receivable
1. Which ratio indicates the effectiveness of a company's credit extension policy? A. days inventory on hand B. accounts payable turnover C. inventory turnover D. days sales outstanding 2. Simmons, Inc. uses lower-of-cost-or-net-realizable-value to value its inventory and reports under IFRS. Data regarding an item in its inventory is as follows: Cost $26 Replacement cost 20 Selling price 30 Cost of completion and disposal 2 Normal profit margin 7 What is the lower-of-cost-or-net-realizable-value for this item? A. $18 B. $26...
Marcello Company’s balance sheet reflected assets of $10,000, liabilities of $5,000 and common stock of $2,000 as of December 31, 2010. What is the balance in the retained earnings account? a. $1,000 b. $3,000 c. $5,000 d. $4,000
Which items from a bond amortization table are reflected on a company’s Balance Sheet? a) Cash paid and Premium/Discount amortization only b) None of the above. c) Interest Expense only d) Interest expense, Cash Paid and Premium/Discount amortization. e) Interest Expense and Cash paid only
O Is reflected by a shift of the production possibilities curve to an inet Increase in the production of one good; while decreasing productio Question 46 A tax on imports of electronic equipment is an example of: an embargo limited quota. a free trade policy a tariff a quota Question 47 An initial deposit of $10.000 at a ratio of 10% from currency in circu change in the composition of the money supply by
Case 2: Credit Policy Management Case Luvly Jubbly Inc., is a wholesaler of merchandise with a British flavour. The merchandise is distributed to Canadian retailers in all provinces. Due to the rise in popularity in Canada of British television shows such as Downton Abbey and Sherlock, the company’s sales have grown by an average of 15% per year over the last five years. The company’s sales are expected to grow by a more modest 10% next year, with all costs...
Demonstrate a sophisticated awareness of ratio analyses and their relevance to the company’s financial health. Just pick a few and explain how they relate to the company’s health. 2017 2016 Current Ratio (Working Capital) 5.78 5.18 Quick Ratio 4.89 4.60 A/R Turnover 5.91 5.53
3. Answer the following questions based on the information below Current credit policy(n/a) Proposed credit policy (net 30) Price (RO) 15 15 Variable cost per unit (RO) 10 11 Quantity 100,000 140,000 Monthly rate 1.20% hs a. What is the incremental cash flows from switching credit policies? (2 pts) b. What is the cost of switching? (2 pt) a. What is the incremental cash flows from switching credit policies? (2 pts) b. What is the cost of switching? (2 pt)...
A company’s balance sheet reports total liabilities of $2,000,000. The debt to equity ratio is 2.5. What is the company’s stockholders' equity? Multiple Choice $800,000 $2,000,000 $1,000,000 $320,000
Evaluate the effects of a firm relaxing it’s credit policy
Tightening Credit Terms Firm's current credit terms, net Industry-wide credit terms, net Discounts Bad Debt Losses Firm's variable cost ratio Tax rate Interest rate on funds invested in receivables Days in year 90 days 30days 63.00% 40.00% 20.00% Current Credit Policy Annual credit sales Days sales outstanding. DSO 2,840,000 95 days New Credit Policy, Tighten to Industry-Average Credit Terms Annual credit sales Days sales outstanding, DSO $2,715,000 35days Effect of Projected Income Statement Under Current Credit Policy Statement Under New...