Question

?(*Evaluating**liquidity*?)

The Tabor Sales Company had a gross profit margin? (grossprofitsdivided by÷?sales)of 30.3 percent and sales of ?$9.1 million last year.? Seventy-five percent of the? firm's sales are on credit and the remainder are cash sales.? Tabor's current assets equal ?$2.7 ?million, its current liabilities equal ?$310,000 and it has 105,000 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 average collection
period to 24 ?days, what will be its new level of accounts?
receivable?

**c.** ?Tabor's inventory turnover ratio is 9.3
times. What is the level of? Tabor's inventories?

Answer #1

(Evaluating liquidity) The Tabor Sales Company had a gross
profit margin (gross profits ÷ sales) of 30.0 percent and sales
of $9.0 million last year. Seventy-five percent of the firm's
sales are on credit and the remainder are cash sales. Tabor's
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 average collection...

(Evaluating liquidity) The Tabor Sales Company had a gross
profit margin (gross profits divided by ÷sales) of 30.4 percent
and sales of $9.2 million last year. Seventy-five percent of the
firm's sales are on credit and the remainder are cash sales.
Tabor's current assets equal $2.1 million, its current
liabilities equal $319,000, and it has $99,000 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 average...

The Tabor Sales Company had a gross profit margin (gross profits
divided by sales) of 30.7 percent and sales of $9.4 million last
year. Seventy-five percent of the firm's sales are on credit and
the remainder are cash sales. Tabor's current assets equal $2.7
million, its current liabilities equal $283000 , and it has $98000
in cash plus marketable securities.
a. If Tabor's accounts receivable are $562500 , what is its
average collection period?
b. If Tabor reduces its average...

(Evaluating liquidity) The Tabor Sales Company had a gross
profit margin (gross profits divided by sales) of 30.0 percent
and sales of $9.0 million last year. Seventy-five percent of the
firm's sales are on credit and the remainder are cash sales.
Tabor's current assets equal $1.5 million, its current
liabilities equal $300 comma 000, and it has $100 comma 000 in
cash plus marketable securities.
a. If Tabor's accounts receivable are $562 comma 500, what is
its average collection period?...

The Brenmar Sales Company had a gross profit margin (gross
profits÷sales) of 34 percent and sales of $8.7 million last year.
70 percent of the firm's sales are on credit, and the remainder
are cash sales. Brenmar's current assets equal $1.4 million, its
current liabilities equal $295,900, and it has $109,500 in cash
plus marketable securities.
a. If Brenmar's accounts receivable equal $562,300, what is
its average collection period?
b. If Brenmar reduces its average collection period to 25...

(Efficiency analysis) The Brenmar Sales Company had a gross
profit margin (gross profits÷sales) of 32 percent and sales of
$9.8 million last year. 78 percent of the firm's sales are on
credit, and the remainder are cash sales. Brenmar's current
assets equal $1.4 million, its current liabilities equal $295,600,
and it has $102,300 in cash plus marketable securities.
a. If Brenmar's accounts receivable equal $563,200, what is
its average collection period?
b. If Brenmar reduces its average collection period...

(Efficiency analysis) The Brenmar Sales Company had a gross
profit margin (gross
profitsdivided by÷sales)
of
27
percent and sales of
$8.5
million last year.
73
percent of the firm's sales are on credit, and the remainder
are cash sales. Brenmar's current assets equal
$1.1
million, its current liabilities equal
$303,200,
and it has
$100,400
in cash plus marketable securities.a. If Brenmar's accounts
receivable equal
$563,200,
what is its average collection period?b. If Brenmar reduces its
average collection period to...

The Brenmar Sales Company had a gross profit margin (gross
profits divided by ÷sales) of 25 percent and sales of $ 9.5
million last year. 70 percent of the firm's sales are on credit,
and the remainder are cash sales. Brenmar's current assets equal
$ 1.3 million, its current liabilities equal $298,600, and it has
$104,200 in cash plus marketable securities.
a. If Brenmar's accounts receivable equal $563,200, what is
its average collection period?
b. If Brenmar reduces its...

ALei Industries has credit sales of $143 million a year. ?
ALei's management reviewed its credit policy and decided that it
wants to maintain an average collection period of 45 days.
a.What is the maximum level of accounts receivable that ALei can
carry and have a 45?-day average collection? period?
b.If? ALei's current accounts receivable collection period is 55
?days, how much would it have to reduce its level of accounts
receivable in order to achieve its goal of 45...

ALei Industries has credit sales of $ 153 million a year.
ALei's management reviewed its credit policy and decided that it
wants to maintain an average collection period of 45 days.
a. What is the maximum level of accounts receivable that ALei
can carry and have a 45-day average collection period?
b. If ALei's current accounts receivable collection period is
55 days, how much would it have to reduce its level of accounts
receivable in order to achieve its...

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