Foundations of Finance (9th Edition) (Pearson Series in Finance)
9th Edition
ISBN: 9780134083285
Author: Arthur J. Keown, John D. Martin, J. William Petty
Publisher: PEARSON
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Textbook Question
Chapter 4, Problem 8SP
(Evaluating liquidity) The Tabor Sales Company had a gross profit margin (gross profits ÷ sales) of 30 percent and sales of $9 million last year. Seventy-five percent of the firm’s sales are on credit and the remainder are cash sales. Tabor current assets equal $1.5 million, its current liabilities equal $300,000, and it has $100,000 in cash plus marketable securities.
- a. If Tabor’s accounts receivable are $562,500, what is its average collection period?
- b. If Tabor reduces its days in receivable (average collection period) to 20 days, what will be its new level of accounts receivable?
- c. Tabor’s inventory turnover ratio is 9 times. What is the level of Tabor’s inventories?
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Chapter 4 Solutions
Foundations of Finance (9th Edition) (Pearson Series in Finance)
Ch. 4 - Describe the five-question approach to using...Ch. 4 - What are the limitations of industry average...Ch. 4 - What is the difference between a firms gross...Ch. 4 - Prob. 9RQCh. 4 - Prob. 11RQCh. 4 - Prob. 1SPCh. 4 - (Evaluating profitability) The Malia Corporation...Ch. 4 - (Evaluating profitability) Last year, Stevens,...Ch. 4 - (Price/ book) Chang, Inc.s balance sheet shows a...Ch. 4 - Prob. 5SP
Ch. 4 - (Ratio analysis) The balance sheet and income...Ch. 4 - (Analyzing operating return on assets) The D.A....Ch. 4 - (Evaluating liquidity) The Tabor Sales Company had...Ch. 4 - (Evaluating current and proforma profitability)...Ch. 4 - (Financial analysis) The T. P. Jarmon Company...Ch. 4 - (Economic Value Added) K. Johnson, Inc.’s managers...Ch. 4 - Prob. 16SPCh. 4 - Prob. 17SPCh. 4 - Prob. 18SPCh. 4 - Prob. 1MCCh. 4 - Prob. 2MCCh. 4 - Prob. 3MCCh. 4 - Prob. 4MC
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