The Brenmar Sales Company had a gross profit margin (gross profits÷sales) of 34 percent and sales of $9.2 million last year. 73 percent of the firm's sales
The Brenmar Sales Company had a gross profit margin (gross profits÷sales) of 34 percent and sales of $9.2 million last year. 73 percent of the firm's sales
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 8P
Related questions
Question
The Brenmar Sales Company had a gross profit margin (gross
profits÷sales)
of
34
percent and sales of
$9.2
million last year.
73
percent of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal
$1.2
million, its current liabilities equal
$300,700,
and it has
$109,000
in cash plus marketable securities.
a. If Brenmar's accounts receivable equal
$562,900,
what is its 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
9.3
times. What is the level of Brenmar's inventories?Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning