Millennial Manufacturing has net credit sales for 2018 in the amount of $1,463,630, beginning accounts receivable balance of $588,900, and an ending accounts receivable balance of $626,450. A. Compute the accounts receivable turnover ratio and the number of days' sales in receivables ratio for 2018. Round answers to two decimal places. Accounts receivable turnover ratio fill in the blank 1 times Sales in receivables ratio fill in the blank 2 days B. What do the outcomes tell a potential investor about Millennial Manufacturing if industry average is 2.6 times and number of day’s sales ratio is 180 days? a. Millennial Manufacturing collects its accounts more quickly than its competitors. b. A lender may favour Millennial Manufacturing over its competitors because of its faster collection period. c. Without prior years’ data it is hard to tell if Millennial Manufacturing is really more efficient than its competitors. d. All of the above statements may be correct.
Millennial Manufacturing has net credit sales for 2018 in the amount of $1,463,630, beginning accounts receivable balance of $588,900, and an ending accounts receivable balance of $626,450. A. Compute the accounts receivable turnover ratio and the number of days' sales in receivables ratio for 2018. Round answers to two decimal places. Accounts receivable turnover ratio fill in the blank 1 times Sales in receivables ratio fill in the blank 2 days B. What do the outcomes tell a potential investor about Millennial Manufacturing if industry average is 2.6 times and number of day’s sales ratio is 180 days? a. Millennial Manufacturing collects its accounts more quickly than its competitors. b. A lender may favour Millennial Manufacturing over its competitors because of its faster collection period. c. Without prior years’ data it is hard to tell if Millennial Manufacturing is really more efficient than its competitors. d. All of the above statements may be correct.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Millennial Manufacturing has net credit sales for 2018 in the amount of $1,463,630, beginning
A. Compute the accounts receivable turnover ratio and the number of days' sales in receivables ratio for 2018. Round answers to two decimal places.
| Accounts receivable turnover ratio | fill in the blank 1 times |
| Sales in receivables ratio | fill in the blank 2 days |
B. What do the outcomes tell a potential investor about Millennial Manufacturing if industry average is 2.6 times and number of day’s sales ratio is 180 days?
| a. | Millennial Manufacturing collects its accounts more quickly than its competitors. |
| b. | A lender may favour Millennial Manufacturing over its competitors because of its faster collection period. |
| c. | Without prior years’ data it is hard to tell if Millennial Manufacturing is really more efficient than its competitors. |
| d. | All of the above statements may be correct. |
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