Direct write off method refers to the method in which the debtors which are declared uncollected or bad will be expensed in the income statement directly without transferring to the allowance for doubtful debts. Liquidity metric days' sale in receivable is a metric made on the basis of measuring the collectibles frequency ability on their due dates. In general, it measures the ability of the company in converting the receivables into cash. Profitability metric return on sales is the one which helps in analyzing the working performance of the company i.e. its growth, profits and gains and also reflects the relation between the expenses and revenue of the company. The effect of each transaction on liquidity metric days' sale in receivable and profitable metric return on sales.

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Chapter 6, Problem 6.1MBA

To determine

Concept Introduction:

Direct write off method refers to the method in which the debtors which are declared uncollected or bad will be expensed in the income statement directly without transferring to the allowance for doubtful debts.

Liquidity metric days' sale in receivable is a metric made on the basis of measuring the collectibles frequency ability on their due dates. In general, it measures the ability of the company in converting the receivables into cash.

Profitability metric return on sales is the one which helps in analyzing the working performance of the company i.e. its growth, profits and gains and also reflects the relation between the expenses and revenue of the company.

The effect of each transaction on liquidity metric days' sale in receivable and profitable metric return on sales.

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