A firm has an average collection period of 10 days. The industry average ACP is 25 days. Is this a good or poor sign about the management of the firm’s accounts receivable?
Answer to relevant QuestionsA firm has a debt ratio of 20 percent. The industry average debt ratio is 65 percent. Is this a good or poor sign about the management of the firm’s financial leverage?Why is it important to know a firm’s accounting rules before making any conclusions about its performance from ratios analysis?Tiggie’s Dog Toys, Inc. reported a debt-to-equity ratio of 1.75 times at the end of 2015. If the firm’s total debt at year-end was $25 million, how much equity does Tiggie’s have on its balance sheet?You have the following information on Els’ Putters, Inc.: sales to working capital is 4.6 times, profit margin is 20 percent, net income available to common stockholders is $5 million, and current liabilities are $6 ...You are considering investing in Nuran Security Services. You have been able to locate the following information on the firm: total assets are $24 million, accounts receivable are $3.3 million, ACP is 25 days, net income is ...
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