Question: A. The table below presents the average settlement period for accounts receivable for William Muffet Ltd for the years 2017 to 2019. The ratios showed

A. The table below presents the average settlement period for accounts receivable for William Muffet Ltd for the years 2017 to 2019. The ratios showed that the customers have been taking more time to pay their accounts, compared to the permitted length of credit of not more than 18 days. 2017 2018 2019 Average settlement period for accounts receivable 21.9 29.7 34.8 [TASK] As a credit manager for William Muffet Ltd, suggest three actions to speed up the collection of accounts receivable. Explain in detail how these actions can improve the collections of accounts receivable. [9 marks] B. The table presents the ratios for Pristine Berhad for the years 2018 and 2019. 2018 41.8% 2019 49.8% Gross profit margin Profit margin 23.5% 25% Asset turnover 0.9 0.9 [TASK] Using the above ratios, comment on the profitability of Pristine Berhad for the financial years 2018 and 2019. [8 marks]
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
