The Brenmar Sales Company had a gross profit margin (gross profits divided by sales) of 31%...

The Brenmar Sales Company had a gross profit margin (gross profits divided by sales) of 31% and sales of $9.8 million last year. 80% of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal $1.5 million, it's current liabilities equal $303,000 and it has $103,100 in cash plus marketable securities.

Please answer the following,

a. If Brenmar's accounts receivable equal $561,800 what is the average collection period?

b. If Brenmar reduces its average collection period to 25 days, what will be its new level of accounts receivable?

c. Brenmar's inventory turnover ratio is 8.9 times. What is the level of Brenmar's inventories?

Expert Solution

jeff jeffy answered 2 years ago

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