F371 Essn. of Corporate Finance >C< By Ross MCG Custom ISBN 9781259320576
14th Edition
ISBN: 9781259320576
Author: Ross, Westerfield, Jordan
Publisher: MCG CUSTOM
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Chapter 16, Problem 3QP
Changes in the Operating Cycle. Indicate the effect that the following will have on the operating cycle. Use the letter I to indicate an increase, the letter D for a decrease, and the letter N for no change.
- a. Average receivables go up.
- b. Credit payment times for customers are increased.
- c. Inventory turnover goes from 3 times to 7 times.
- d. Payables turnover goes from 6 times to 11 times.
- e. Receivables turnover goes from 7 times to 9 times.
- f. Payments to suppliers are accelerated.
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Students have asked these similar questions
What relationship exists between the average collection period and accounts receivable turnover?
Select one:
a. There is a direct and proportional relationship.
b. Both ratios are expressed in number of days.
c. As average collection period increases (decreases) the accounts receivable turnover decreases (increases).
d. Both ratios are expressed in number of times receivables are collected per year.
Days' sales in receivables
a.measures the number of times the receivables turn over each year
b.is an estimate of the length of time the receivables have been outstanding
c.is credit sales divided by average receivables
d.is not meaningful and therefore is not used
the best sentence reflect the decrease in trade receivables balance at the end of the year :
إختر أحد الخيارات:
a.
decrease the current ratio
b.
decrease the quick ratio.
c.
increase the current ratio and quick ratio
d.
decrease the current ratio and quick ratio.
Chapter 16 Solutions
F371 Essn. of Corporate Finance >C< By Ross MCG Custom ISBN 9781259320576
Ch. 16.1 - What is the difference between net working capital...Ch. 16.1 - Prob. 16.1BCQCh. 16.1 - Prob. 16.1CCQCh. 16.1 - List five potential sources of cash.Ch. 16.2 - What does it mean to say that a firm has an...Ch. 16.2 - Prob. 16.2BCQCh. 16.2 - Prob. 16.2CCQCh. 16.3 - Prob. 16.3ACQCh. 16.3 - Prob. 16.3BCQCh. 16.4 - Prob. 16.4ACQ
Ch. 16.4 - Prob. 16.4BCQCh. 16.5 - What are the two basic forms of short-term...Ch. 16.5 - Prob. 16.5BCQCh. 16.6 - Prob. 16.6ACQCh. 16.6 - Prob. 16.6BCQCh. 16 - Prob. 16.1CCh. 16 - Prob. 16.2CCh. 16 - Prob. 16.3CCh. 16 - Prob. 16.5CCh. 16 - Prob. 16.6CCh. 16 - Operating Cycle. What are some of the...Ch. 16 - Prob. 2CTCRCh. 16 - Prob. 3CTCRCh. 16 - Cost of Current Assets. Kane Manufacturing. Inc.,...Ch. 16 - Prob. 5CTCRCh. 16 - Prob. 6CTCRCh. 16 - Prob. 7CTCRCh. 16 - Use the following information to answer Questions...Ch. 16 - Prob. 9CTCRCh. 16 - Prob. 10CTCRCh. 16 - Prob. 1QPCh. 16 - Prob. 2QPCh. 16 - Changes in the Operating Cycle. Indicate the...Ch. 16 - Prob. 4QPCh. 16 - Prob. 5QPCh. 16 - Prob. 6QPCh. 16 - Prob. 7QPCh. 16 - Prob. 8QPCh. 16 - Prob. 9QPCh. 16 - Prob. 10QPCh. 16 - Prob. 11QPCh. 16 - Prob. 12QPCh. 16 - Prob. 13QPCh. 16 - Prob. 14QPCh. 16 - Prob. 15QPCh. 16 - Prob. 16QPCh. 16 - Prob. 17QPCh. 16 - Prob. 18QPCh. 16 - Prob. 1CC
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- To increase its sales, a company decides to increase its credit terms from 15 to 30 days. What effect will this change in policy have on receivables turnover and days' sales uncollected?arrow_forwardA. Assume that all sales are on account. If sales revenue was $18,000,000 and the average days in accounts receivable was 38 days for the last operating year, what would the average accounts receivable balance have been? a. $1,680,000 b. $1,500,000 c. $1,875,000 d. $18,000,000 B. If accounts receivable is projected to be $800,000 at the beginning of the next operating year and $1,100,000 at the end of the next operating year: would cash be generated by accounts receivable or needed to fund accounts receivable? And, by how much? a. $300,000 of cash needed to fund accounts receivable b. $1,100,000 of cash needed to fund accounts receivable c. $500,000 of cash needed to fund accounts receivable d. $300,000 of cash generated by accounts receivablearrow_forwardIf you are told that LSJ Company turns its accounts receivable over every 33 days…this would represent an example of what type of analysis: a. Vertical Analysis b. Horizontal Analysis c. Ratio Analysisarrow_forward
- Which of the following is NOT a correct explanation for turnover ratios and periods calculated based on them? Select one: a. Receivables turnover indicates how many times a company circulates its receivables in a year. b. Average collection period is the number of days between the sale transaction and the collection of receivable from customer. c. Inventory turnover is the number of days between purchase of inventory and its sale to the customer. d. Average payment period is the number of days between the purchase transaction and the payment of payables to the suppliers. Clear my choicearrow_forwardWhen analyzing financial statements, what can you conclude when the accounts receivable turnover ratio decreases from 9.0 to 6.0 over a three year period. Group of answer choices None of the above b. The collection period has increased over time a. Collections are within standard terms c. The collection period has decreased over timearrow_forwardAccounts receivable turnover is 4. What is the average collection period assuming annual data are used? What is the average collection period assuming quarterly data are used?arrow_forward
- calculate these (d) Current ratio :1 (e) Accounts receivable turnover times (f) Average collection period daysarrow_forwardTrout Lumber Yard has a current accounts receivable balance of $440,516. Credit sales for the year just ended were $6,354,830. a. What is the receivables turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the days’ sales in receivables? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. How long did it take on average for credit customers to pay off their accounts during the past year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)arrow_forwardNed Sdn Bhd's trade receivable days have been getting shorter in recent years. Which of the following actions is likely to result in trade receivables days getting longer? A Negotiating longer credit terms with the company's main customer. B Decreasing inventory levels. C Sending reminder letters as soon as the debt is due. D Offering a discount for prompt payment.arrow_forward
- A company reports the following: Sales $1,180,410 Average accounts receivable (net) 56,210 Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover ___________ b. Number of days' sales in receivables ___________ daysarrow_forwardA company reports the following: Sales $572,320Average accounts receivable (net) 20,440Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover fill in the blank 1b. Number of days' sales in receivables fill in the blank 2 daysarrow_forwardAccounts Receivable Analysis (Picture below is shown that 26.07 is wrong answer I also did try 26 days and it is also wrong) let me know what I did wrong.) A company reports the following: Sales $429,240 Average accounts receivable (net) 30,660 Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover 14 days b. Number of days' sales in receivables ?arrow_forward
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