A company has the following information: Net credit sales = $400,000 Net income = $100,000 Average total assets = $80,000 Average accounts receivable = $20,000 What is the company's average collection period (rounded to the nearest whole day)? O 73 days. O 18 days. O 5 days. O9 days.

A company has the following information: Net credit sales = $400,000 Net income = $100,000 Average total assets = $80,000 Average accounts receivable = $20,000 What is the company's average collection period (rounded to the nearest whole day)? O 73 days. O 18 days. O 5 days. O9 days.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 44E: Whalen Company had net sales of 125,500,250,000. Whalen had the following balances: Required: Note:...

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

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A company has the following information:
Net credit sales = $400,000
Net income = $100,000
Average total assets = $80,000
Average accounts receivable = $20,000
What is the company's average collection period (rounded to the nearest whole day)?
O 73 days.
O 18 days.
O 5 days.
O 9 days.

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