In 2015, XYZ Corp. had an annual cost of goods sold of $365 million. XYZ’s average accounts receivable balance in 2015 was $35 million, and their average accounts payable balance was $10 million. The terms that XYZ receives on trade credit from its suppliers are 3/20, net 30. Is XYZ managing its accounts payable well? Why/why not? No, because they are paying their suppliers too late Yes, because they are paying their suppliers on the last day to get the discount Yes, because they are strategically stretching their bills past the due date No, because they are paying their suppliers too early

In 2015, XYZ Corp. had an annual cost of goods sold of $365 million. XYZ’s average accounts receivable balance in 2015 was $35 million, and their average accounts payable balance was $10 million. The terms that XYZ receives on trade credit from its suppliers are 3/20, net 30. Is XYZ managing its accounts payable well? Why/why not? No, because they are paying their suppliers too late Yes, because they are paying their suppliers on the last day to get the discount Yes, because they are strategically stretching their bills past the due date No, because they are paying their suppliers too early

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 3P

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