Please answer the following question related to financial ratios:
A firm has an average collection period (ACP) of 10 days. The industry average ACP is 25 days. Is this a good or poor sign about the management of firm’s account receivable?
Homework Answers
The average collection period is the number of days it takes for the money to be received from a sale made on credit. The avergae collection period of 10 days compared to the industry average of 25 days shows the firm is collecting payments faster, so it is a good sign of the management of the firm's accounts receivable.
If a firm has sales of $25,152,000 a year, and the average collection period for the...
If a firm has sales of $25,152,000 a year, and the average collection period for the industry is 30 days, what should this firm’s accounts receivable be if the firm is comparable to the industry? Assume there are 365 days in a year. Do not round intermediate calculations. Round your answer to the nearest dollar. $
Apple Inc. reported in its 2011 financial statements the following numbers: Table 3 Item Amount (in...
Apple Inc. reported in its 2011 financial statements the following numbers: Table 3 Item Amount (in millions) Total revenue 108,000 Cost of revenue 64,400 Inventory 776 Account receivables 13,700 Account payable 23,900 Assuming 360 days a year, what is the average collection period (ACP)? ACP = days (e.g., 105 days)
QUESTION 10: A company has an average collection period of 21 days. The firm’s annual credit...
QUESTION 10: A company has an average collection period of 21 days. The firm’s annual credit sales total $23,389,300. Calculate the firm’s accounts receivable. $1,345,686 $2,012,012 $1,946,090 $1,648,567 none of these QUESTION 11: A firm has an ROE of 18% and a ROA of 12%. What would the equity multiplier (leverage) be? .883 1.02 1.5 20 none of these
Correctly answer is part of question 3 Aa Aa 3. Asset management ratios Asset management ratios...
Correctly answer is part of question 3
Aa Aa 3. Asset management ratios Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio,...
Accounts receivable management This table, shows that Blair Supply had an end-of-year accounts receivable balance of...
Accounts receivable management This table, shows that Blair Supply had an end-of-year accounts receivable balance of $299,875. The table also shows how much of the receivables balance originated in each of the previous six months. The company had annual sales of $2.40 million and it normally extends 30-day credit terms to its customers. a. Use the year-end total to evaluate the firm's collection system. b. If 70% of the firm's sales occur between July and December, would this affect the...
As a board member of Bronson Inc., your SVP-Accounting has recently presented the details of a...
As a board member of Bronson Inc., your SVP-Accounting has recently presented the details of a five-year study of the firm’s cash conversion cycle, ironically, the period of time the SVP has been in charge. The executive summary spreadsheet outlines the following (where ICP = inventory conversion period, ACP = average collection period, PDP = payables deferral period, and AVE = industry average). Column1 ICP ACP PDP CCC AVE 2015 48 34 42 40 59 2014 51 39 30 60...
An analyst has obtained the following information regarding ABC, Inc. Using this information, he needs to...
An analyst has obtained the following information regarding ABC, Inc. Using this information, he needs to estimate the company's Accounts Payable. Sales = $58,983 Cost of Goods Sold (COGS) = $22,810 Cash Cycle = 39 days Operating Cycle = 148 days Accounts Receivable Period = AR Period = Average Collection Period (ACP) = 25 days What is the company's Accounts Payable balance? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer...
all of 18.11 please BE18.11 (LO 3) Writing The following data are taken from the financial...
all of 18.11 please
BE18.11 (LO 3) Writing The following data are taken from the financial statements of Colby Company Evaluate collection of accounts receivable. 2020 Accounts receivable (net), end of year Net sales on account Terms for all sales are 1/10, n/45 $ 550,000 4,300,000 2019 $ 540,000 4,000,000 a. Compute for each year (1) the accounts receivable turnover and (2) the average collection period. At the end of 2018, accounts receivable was $520,000. b. What conclusions about the...
Healthy Hospital has the following receivables amounts, listed by age Value of Age of Account (Days) Account Percentage of Total Value $5,000,000 2,000,000 500,000 200,000 0-30 31-60 61-90 91-120...
Healthy Hospital has the following receivables amounts, listed by age Value of Age of Account (Days) Account Percentage of Total Value $5,000,000 2,000,000 500,000 200,000 0-30 31-60 61-90 91-120 Complete the last column of the chart, and use this information to determine the average collection period (ACP). Select one: a. 29 days b. 60 days С. 37 days d. 42 days
Healthy Hospital has the following receivables amounts, listed by age Value of Age of Account (Days) Account Percentage of...
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...
Correctly answer is part of question 3
Aa Aa 3. Asset management ratios Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio,...
Accounts receivable management This table, shows that Blair Supply had an end-of-year accounts receivable balance of $299,875. The table also shows how much of the receivables balance originated in each of the previous six months. The company had annual sales of $2.40 million and it normally extends 30-day credit terms to its customers. a. Use the year-end total to evaluate the firm's collection system. b. If 70% of the firm's sales occur between July and December, would this affect the...
all of 18.11 please
BE18.11 (LO 3) Writing The following data are taken from the financial statements of Colby Company Evaluate collection of accounts receivable. 2020 Accounts receivable (net), end of year Net sales on account Terms for all sales are 1/10, n/45 $ 550,000 4,300,000 2019 $ 540,000 4,000,000 a. Compute for each year (1) the accounts receivable turnover and (2) the average collection period. At the end of 2018, accounts receivable was $520,000. b. What conclusions about the...
Healthy Hospital has the following receivables amounts, listed by age Value of Age of Account (Days) Account Percentage of Total Value $5,000,000 2,000,000 500,000 200,000 0-30 31-60 61-90 91-120 Complete the last column of the chart, and use this information to determine the average collection period (ACP). Select one: a. 29 days b. 60 days С. 37 days d. 42 days
Healthy Hospital has the following receivables amounts, listed by age Value of Age of Account (Days) Account Percentage of...
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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