A company has an Inventory Turnover Period (ITP) of 60 days and a Credit Collection Period of
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Question:
A company has an Inventory Turnover Period (ITP) of 60 days and a Credit Collection Period of 30 days. This company has a net profit rate of 20% (it sells goods at 20% more than its unit cost).
If he reduces his ITP to 30 days, what percent increase in potential annual profitability?
Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-0324787351
1st Edition
Authors: Rich Jones, Mowen, Hansen, Heitger
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