Days Sales outstanding (DSO) = ( Accounts receivables / Credit sales ) * Days in a year = ( 715000 / 4650000 ) * 365 | 56 | days |
Next year's credit sales = Current year's sales * ( 1 + % increase ) = 4650000 * ( 1 + 12% ) | 5208000 | |
Expected accounts receivables to carry = Desired DSO * Next year's credit sales / Days in a year = 30 * 5208000 / 365 | 428055 |
4. Financial ratios in the forecasting process Malty Publications Inc. currently has $715,000 in accounts receivable...
5. Financial ratios in the forecasting process Malty Publications Inc. currently has $660,000 in accounts receivable and generated $4,910,000 in sales (all on credit) during the year that just ended. The firm's days sales outstanding (DSO) is days? Use 365 days as the length of a year in all calculations. Malty Publications Inc.'s CFO is unhappy with its DSO and wants to improve collections next year. Sales are expected to grow by 16% next year, and the CFO wants to...
4. Financial ratios in the forecasting process Atlantic Northern Inc. currently has $620,000 in accounts receivable and generated $4,440,000 in sales (all on credit) during the year that just ended. The firm's days sales outstanding (DSO) is days. Use 365 days as the length of a year in all calculations. Atlantic Northern Inc.'s CFO is unhappy with its DSO and wants to improve collections next year. Sales are expected to grow by 16% next year, and the CFO wants to...
4. Financial ratios in the forecasting process Your boss has asked you to take a closer look at your company's credit policies. You have been given the following information: Accounts receivable balance: $715,000 Average daily sales: $12,980 Weighted average cost of capital: 11% Your firm's days sales outstanding (DSO) is Your boss is unhappy with your company's DSO and wants to bring it down to the industry average of 25 days. The marketing department told you that they expect sales...
4. Financial ratios in the forecasting process Your boss has asked you to take a closer look at your company's credit policies. You have been given the following information: Accounts receivable balance: $715,000 Average daily sales: $12,980 Weighted average cost of capital: 8% Your firm's days sales outstanding (DSO) is Your boss is unhappy with your company's DSO and wants to bring it down to the industry average of 25 days. The marketing department told you that they expect sales...
DSO and Accounts Receivable Harrelson Inc. currently has $765,000 in accounts receivable, and its days sales outstanding (DSO) is 53 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 20%, what will be the level of accounts receivable following the change? Assume a 365-day year. Round your answer to the nearest cent.
DSO AND ACCOUNTS RECEIVABLE Ingraham Inc. currently has $410,000 in accounts receivable, and its days sales outstanding (DSO) is 48 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 5%. 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...
DSO AND ACCOUNTS RECEIVABLE Ingraham Inc. currently has $810,000 in accounts receivable, and its days sales outstanding (DSO) is 75 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 10%. 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...
Problem Walk-Through DSO AND ACCOUNTS RECEIVABLE Ingraham Inc. currently has $520,000 in accounts receivable, and its days sales outstanding (DSO) is 58 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 10%. What will be the level of accounts receivable following the change? Assume a 365 day year. Do not round Intermediate calculations. Round your...
Ch 16: Assignment - Financial Planning and Forecasting Attempts: Keep the Highest: 12 5. Using regression analysis to forecast assets The APN equation and the financial statement-forecasting approach both assume that assets grow at relatively the same rate as sales. However, the relationship between assets and sales is often a little more difficult than that. In particular, some firms use regression analysis to predict the required assets needed to support a given level of sales. U.S. Robotics Inc. has used...
Click here to read the eBook: Asset Management Ratios Problem Walk-Through DSO AND ACCOUNTS RECEIVABLE Ingraham Inc. currently has $365,000 in accounts receivable, and its days sales outstanding (DSO) is 53 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 20%. What will be the level of accounts receivable following the change? Assume a 365-day...