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: Average daily sales: Weighted average cost of capital: $660,000 $13,111 12% 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 to grow by 14% next year. This means that your company can expect to have an accounts receivable balance of next year.
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: Average daily sales: Weighted average cost of capital: $660,000 $13,111 12% 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 to grow by 14% next year. This means that your company can expect to have an accounts receivable balance of next year.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text: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:
$660,000
Average daily sales:
$13,111
Weighted average cost of capital: 12%
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 to grow by 14% next year. This means that your company can expect to have an accounts receivable balance of
next year.
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