Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)
14th Edition
ISBN: 9780133507690
Author: Lawrence J. Gitman, Chad J. Zutter
Publisher: PEARSON
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Chapter 3, Problem 3.16P
| Month of origin | Accounts receivable |
| July | $3,875 |
| August | 2,000 |
| September | 34,025 |
| October | 15,100 |
| November | 52,000 |
| December | 193,000 |
| Year-end accounts receivable | $300,000 |
- a. Use the year-end total to evaluate the firm’s collection system.
- b. If 70% of the firm’s sales occur between July and December, would this information affect the validity of your conclusion in part a? Explain.
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Accounts receivable management This table,, shows that Blair Supply had an end-of-year accounts receivable balance of $299,915. The table also shows how much of the receivables balance originated in each of the previous six months. The company had annual sales
of $2.40 million and it normally extends 30-day credit terms to its customers.
a. Use the year-end total to evaluate the firm's collection system.
b. If 70% of the firm's sales occur between July and December, would this affect the validity of your conclusion in part a? Explain.
a. The average collection period is days. (Round to two decimal places.)
Accounts receivable management This table,, shows that Blair Supply had an end-of-year accounts receivable balance of $300,060 The table also shows how much of the receivables balance originated in each
of the previous six months. The company had annual sales of $2.40 million and it normally extends 30-day credit terms to its customers.
a. Use the year-end total to evaluate the firm's collection system.
b. If 70% of the firm's sales occur between July and December, would this affect the validity of your conclusion in part a? Explain.
a. The average collection period is days. (Round to two decimal places.)
Data table
(Click on the icon located on the top-right corner of the data table below in order to
copy its contents into a spreadsheet.)
Month of Amounts receivable origin
July
$3,880
August
2,005
September
33,995
October
15,150
November
52,005
December
193,025
Year-end accounts receivable
$300,060
- X
K
Accounts receivable management This table, shows that Blair Supply had an end-of-year accounts receivable
balance of $300,000. The table also shows how much of the receivables balance originated in each of the previous six
months. The company had annual sales of $2.40 million and it normally extends 30-day credit terms to its customers.
a. Use the year-end total to evaluate the firm's collection system.
b. If 70% of the firm's sales occur between July and December, would this affect the validity of your conclusion in part
a? Explain.
a. The average collection period is days. (Round to two decimal places.)
Chapter 3 Solutions
Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)
Ch. 3.1 - Prob. 1FOECh. 3.1 - Prob. 2FOECh. 3.1 - Prob. 3.1RQCh. 3.1 - Describe the purpose of each of the four major...Ch. 3.1 - Prob. 3.3RQCh. 3.1 - Prob. 3.4RQCh. 3.2 - With regard to financial ratio analysis, how do...Ch. 3.2 - What is the difference between cross-sectional and...Ch. 3.2 - Prob. 3.7RQCh. 3.2 - Prob. 3.8RQ
Ch. 3.3 - Under what circumstances would the current ratio...Ch. 3.3 - In Table 3.5, most of the specific firms listed...Ch. 3.4 - To assess the firms average collection period and...Ch. 3.5 - What is financial leverage?Ch. 3.5 - What ratio measures the firms degree of...Ch. 3.6 - What three ratios of profitability appear on a...Ch. 3.6 - Prob. 3.15RQCh. 3.6 - Prob. 3.16RQCh. 3.7 - Prob. 3.17RQCh. 3.8 - Financial ratio analysis is often divided into...Ch. 3.8 - Prob. 3.19RQCh. 3.8 - What three areas of analysis are combined in the...Ch. 3 - Prob. 1ORCh. 3 - Learning Goals 3, 4, 5 ST3-1 Ratio formulas and...Ch. 3 - Prob. 3.2STPCh. 3 - Prob. 3.1WUECh. 3 - Learning Goal 1 E3-2 Explain why the income...Ch. 3 - Prob. 3.3WUECh. 3 - Prob. 3.4WUECh. 3 - Learning Goal 6 E3-5 If we know that a firm has a...Ch. 3 - Financial statement account identification Mark...Ch. 3 - Prob. 3.3PCh. 3 - Prob. 3.4PCh. 3 - Prob. 3.5PCh. 3 - Prob. 3.6PCh. 3 - Prob. 3.8PCh. 3 - Prob. 3.9PCh. 3 - Prob. 3.10PCh. 3 - Prob. 3.11PCh. 3 - Learning Goals 2, 3, 4, 5 P3-10 Ratio comparisons...Ch. 3 - Prob. 3.13PCh. 3 - Prob. 3.14PCh. 3 - Accounts receivable management The table below...Ch. 3 - Prob. 3.18PCh. 3 - Prob. 3.20PCh. 3 - The relationship between financial leverage and...Ch. 3 - Prob. 3.22PCh. 3 - Prob. 3.23PCh. 3 - Prob. 3.24PCh. 3 - Prob. 3.25PCh. 3 - Prob. 3.27PCh. 3 - Prob. 1SE
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