Using the financial statements presented in problem 6, determine Genatron’s degree of operating leverage in each of the years presented. Assume the cost of goods sold and marketing expenses are variable costs and all other costs are fixed.
Answer to relevant QuestionsUsing your estimate for the degree of operating leverage for Genatron in 2015, estimate the level of operating income if the following year’s sales a) rise by 5 percent; b) fall by 12 percent. Describe the four motives or reasons for holding cash. What are some strategies a firm can use to speed up its collections by reducing float? How can a firm control the risk of changing exchange rates when billing an overseas customer? The Robinson Company from Problem 2 had net sales of $1,200,000 in 2013 and $1,300,000 in 2014. a. Determine the receivables turnover in each year. b. Calculate the average collection period for each year. c. Based on the ...
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