General Accounting Galambos Corporation had an average receivables collection period of 19days in 2003. Galambos has stated that it wants to decrease its collectionperiod in 2004 to match the industry average of 15 days. Credit sales in2003 were $300 million, and analysts expect credit sales to increase to$400 million in 2004. To achieve the company's goal of decreasing thecollection period, the change in the average accounts receivable balancefrom 2003 to 2004 that must occur is closest to:A. -$420,000B. $420,000C. $836,000

Step 1: Define Average Collection PeriodThe average collection period or days' sales receivable…

Answered: Galambos Corporation had an average…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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Data on Nathan Enterprises for the most recent year are shown below, along with the days sales outstanding of the firms against which it benchmarks. The firm's new CFO believes that the company could reduce its receivables enough to reduce its DSO to the benchmarks' average. If this were done, by how much would receivables decline? Use a 365-day year. Sales $110,000 Accounts receivable $16,000 Days sales outstanding (DSO) 53.09 Benchmark days sales outstanding (DSO) 20.00 a. $9,973 b. $8,078 c. $8,975 d. $10,970 e. $12,067
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