The information on the next page has been extracted from the financial statements of Crystal Craft Ltd.
Question:
The information on the next page has been extracted from the financial statements of Crystal Craft Ltd.
2015 | 2016 | 2017 | |||
Cash at bank Marketable securities Accounts receivable Sales revenue (all sales on credit) Cost of sales | $ 44 000 88 000 102 000 1 108 000 672 000 | $ 40 000 100 000 108 000 1 120 000 680 000 | $ 36 000 96 000 124 000 1 130 000 700 000 |
Required
A. Calculate the following for years 2016 and 2017:
1. The receivables turnover ratio
2. Average collection period of accounts receivable.
B. Based on the ratios calculated in requirement A, comment on the credit collection policies of the company. What additional information would make an analysis of cash collection policies more meaningful?
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
A 2016 2017 Receivables turnover ratio Net credit sales revenue Average receivables 1 120 000 102 00...View the full answer
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett
