At the end of the fiscal year, Big Box Depot had account receivables of $1.89 billion on net sales of $8.5 billion. At the same point in time, Lumber Jack Inc. had accounts receivable of $6.3 billion on net sales of $9.2 billion. Each company had cash on hand of $600,000. Calculate the accounts receivable turnover and days' sales outstanding (DSO) for each company. Based solely on these metrics, which company reported stronger financial metrics. Explain.
At the end of the fiscal year, Big Box Depot had account receivables of $1.89 billion on net sales of $8.5 billion. At the same point in time, Lumber Jack Inc. had accounts receivable of $6.3 billion on net sales of $9.2 billion. Each company had cash on hand of $600,000. Calculate the accounts receivable turnover and days' sales outstanding (DSO) for each company. Based solely on these metrics, which company reported stronger financial metrics. Explain.
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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At the end of the fiscal year, Big Box Depot had account receivables of $1.89 billion on net sales of $8.5 billion. At the same point in time, Lumber Jack Inc. had
- Calculate the accounts receivable turnover and days' sales outstanding (DSO) for each company.
- Based solely on these metrics, which company reported stronger financial metrics. Explain.
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