Ingraham Inc. currently has $560,000 in accounts receivable, and its days sales outstanding (DSO) is 55...

Ingraham Inc. currently has $560,000 in accounts receivable, and its days sales outstanding (DSO) is 55 days. It wants to reduce its DSO to 25 days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by 15%. What will be the level of accounts receivable following the change? Assume a 365-day year. Round your answer to the nearest cent.

Solutions

Expert Solution

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Ingraham Inc. currently has $895,000 in accounts receivable, and its days sales outstanding (DSO) is 46...

Ingraham Inc. currently has $895,000 in accounts receivable, and its days sales outstanding (DSO) is 46 days. It wants to reduce its DSO to 20 days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by 15%. What will be the level of accounts receivable following the change? Assume a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent.

Say Zuzu Company currently has $10,000,000 in accounts receivable. It has day sales outstanding (DSO) of...

Say Zuzu Company currently has $10,000,000 in accounts receivable. It has day sales outstanding (DSO) of 60 days. Assume a 360-day year. The company wants to reduce its DSO to the industry average of 30 days by pressuring more of its customers to pay their bills on time. The company's CFO estimates that if this policy is adopted the company's average sales will fall by 20 percent. Assuming that the company adopts this change, succeeds in reducing its DSO to...

Victoria has 3.2 mi. of accounts receivable and 5mi. of current assets. It’s DSO (days sales...

Victoria has 3.2 mi. of accounts receivable and 5mi. of current assets. It’s DSO (days sales outstanding in receivables) is 40 (based on a 365-day year), and it’s current ratio is 1.5. The firm plans to reduce its DSO to the industry average of 30 without causing a decline in sales. The resulting decrease in accounts receivable will free up cash that will be used to reduce current liabilities. If this plan succeeds, what will be the new current ratio?

8. Campbell Computing Inc. currently has sales of $1,000,000, and its days sales outstanding is 30...

8. Campbell Computing Inc. currently has sales of $1,000,000, and its days sales outstanding is 30 days. The financial manager estimates that offering longer credit terms would (1) increase the days sales outstanding to 50 days and (2) increase sales to $1,200,000. However, bad debt losses, which were 2 percent on the old sales, would amount to 5 percent on the incremental sales only (bad debts on the old sales would stay at 2 percent). Variable costs are 80 percent...

Geoffrey’s Toy Box currently has sales of $1,000,000, and its days sales outstanding is 30 days....

Geoffrey’s Toy Box currently has sales of $1,000,000, and its days sales outstanding is 30 days. The new CFO estimates that offering longer credit terms would (1) increase the days sales outstanding to 50 days and (2) increase sales to $1,200,000. However, bad debt losses, which were 2 percent on the old sales, would increase to 5 percent on the incremental sales while bad debts on the old sales would stay at 2 percent. Variable costs are 80 percent of...

Geoffrey’s Toy Box currently has sales of $1,000,000, and its days sales outstanding is 30 days....

1. Braswell & Associates has a DSO of 27 days, and its annual sales are $6,200,000....

1. Braswell & Associates has a DSO of 27 days, and its annual sales are $6,200,000. What is its accounts receivable balance? Assume it uses a 365-day year. a. $167,400,000 b. $629 c. $344,130 d. $229,630 e. $458,630 2.A firm has a profit margin of 2.5 percent and an equity multiplier of 2. Its sales are $120 million and it has total assets of $30 million. What is its return on equity (ROE)? a. 1.25% b. 20.00% c. 32.00% d....

Baxley Brothers has a DSO of 33 days, and its annual sales are $10,220,000. What is...

Baxley Brothers has a DSO of 33 days, and its annual sales are $10,220,000. What is its accounts receivable balance? Assume that it uses a 365-day year. Round your answer to the nearest dollar. _____ Kaye's Kitchenware has a market/book ratio equal to 1. Its stock price is $13 per share and it has 4.5 million shares outstanding. The firm's total capital is $140 million and it finances with only debt and common equity. What is its debt-to-capital ratio? Round...

Harrelson Inc. currently has $750,000 in accounts receivable

Harrelson Inc. currently has $750,000 in accounts receivable, and its days sales outstanding (DSO) is 55 days. It wants to reduce its DSO to 35 days by pressuring more of its customers to pay their bills on time. If this policy is adopted the company's average sales will fall by 15 percent. What will be the level of accounts receivable following the change? Assume a 365 day year.

1. Define the accounts receivable turnover and the days sales outstanding ratios. What do these ratios...

1. Define the accounts receivable turnover and the days sales outstanding ratios. What do these ratios tell us about a company’s accounts receivable? 2. What effect, if any, does a strengthening of the dollar have on reported sales and net income for companies operating outside the United States, when those foreign operations are translated to U.S. dollars for consolidation purposes? 3. How do companies test assets for impairment? If an asset is impaired, how do companies write them down? 4....

Subjects