A COMPANY (Each question is worth 10 points- use your text to complete these) Terms Net...
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"A" COMPANY (Each question is worth 10 points- use your text to complete these) Terms Net 30 days Net 30 days 60 days Weekly A/R A/P Inventory cycle Payroll cycle P & L: Sales 2850 - COGS 1425 =GP 1425 - SGA 1200 =OP Profit 225 BALANCE SHEET Assets: Liabilities & Equity: Cash 25 N/P 100 A/R 375 A/P 188 Inv 375 АСС 5 C/A 775 CLTD 20 NFA 60 CL 313 Total Assets 835 LTD 222 N/W 300 TL+N/W 835 (Show all of your work - you may do this in Excel if you like) 1.) Does the Company collect?(Compute Days A/R Ch 10 page 3, compare with terms listed above) Does the Company pay?(Compute Days A/P Ch 10 page 3, 2.) compare with terms listed above) 3.) Does it control inventory?(Compute Days Inventory Ch 10 page 3, compare with terms listed above) ENT305 Cash Flow Week 1 Exercise 1 В. QUALITY INDICATORS A/R Terms vs. When Actually Collected Anyone can sell; can they collect? 30 days really equals 35-40 days Too long: bad management Too short: harassing customers INV Inventory Cycle vs. Actual Days on Hand Too short: stock-outs Too long: cannot get to cash A/P Terms vs. Actual Days Too long: suppliers will cut-off Too short: COD or discounts АСC Payment Cycle vs. Actual Days Wages + Taxes + Interest Skewed days if interest is included 7- 15 days is normal COGS/Sales vs. Days Inventory If COGS/Sales rises and days inventory falls, hidden profits If COGS/Sales falls and days inventory rises, pretend profits INV Game General Rule: Inventory < A/P : Suppliers are not banks; they do not want to finance A/R INV VS A/P DAYS ALSO FORMULAS DAYS X SALES 360 х 360 A/R SALES A/R DAYS A/R DAYS X COGS 360 х 360 INV COGS INV DAYS INV %3D DAYS X COGS 360 х 360 A/P COGS A/P %3D DAYS A/P DAYS X COGS 360 х 360 ACC COGS ACC %3D DAYS ACC %3D Ch. 10 Pg. 3 ED 201 - Business Credit Analysis Text Book *..... ... "A" COMPANY (Each question is worth 10 points- use your text to complete these) Terms Net 30 days Net 30 days 60 days Weekly A/R A/P Inventory cycle Payroll cycle P & L: Sales 2850 - COGS 1425 =GP 1425 - SGA 1200 =OP Profit 225 BALANCE SHEET Assets: Liabilities & Equity: Cash 25 N/P 100 A/R 375 A/P 188 Inv 375 АСС 5 C/A 775 CLTD 20 NFA 60 CL 313 Total Assets 835 LTD 222 N/W 300 TL+N/W 835 (Show all of your work - you may do this in Excel if you like) 1.) Does the Company collect?(Compute Days A/R Ch 10 page 3, compare with terms listed above) Does the Company pay?(Compute Days A/P Ch 10 page 3, 2.) compare with terms listed above) 3.) Does it control inventory?(Compute Days Inventory Ch 10 page 3, compare with terms listed above) ENT305 Cash Flow Week 1 Exercise 1 В. QUALITY INDICATORS A/R Terms vs. When Actually Collected Anyone can sell; can they collect? 30 days really equals 35-40 days Too long: bad management Too short: harassing customers INV Inventory Cycle vs. Actual Days on Hand Too short: stock-outs Too long: cannot get to cash A/P Terms vs. Actual Days Too long: suppliers will cut-off Too short: COD or discounts АСC Payment Cycle vs. Actual Days Wages + Taxes + Interest Skewed days if interest is included 7- 15 days is normal COGS/Sales vs. Days Inventory If COGS/Sales rises and days inventory falls, hidden profits If COGS/Sales falls and days inventory rises, pretend profits INV Game General Rule: Inventory < A/P : Suppliers are not banks; they do not want to finance A/R INV VS A/P DAYS ALSO FORMULAS DAYS X SALES 360 х 360 A/R SALES A/R DAYS A/R DAYS X COGS 360 х 360 INV COGS INV DAYS INV %3D DAYS X COGS 360 х 360 A/P COGS A/P %3D DAYS A/P DAYS X COGS 360 х 360 ACC COGS ACC %3D DAYS ACC %3D Ch. 10 Pg. 3 ED 201 - Business Credit Analysis Text Book *..... ...
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Given AR net 30 days AR 3752850360 47 days The company needs to col... View the full answer
Related Book For
Principles of Taxation for Business and Investment Planning 2016 Edition
ISBN: 9781259549250
19th edition
Authors: Sally Jones, Shelley Rhoades Catanach
Posted Date:
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