John Plc has an annual sale of 160 million a year. Fifty per- cent of their...
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John Plc has an annual sale of €160 million a year. Fifty per- cent of their sales are on credit. The management has decided to maintain an averag collection period of 45 days. a. What is the maximum level of accounts receivable that John Plc can carry and meet their collection period target? b. If John Ple has an average collection period of 60 days, how much does it need to reduce its level of debtors or accounts receivables in order to achieve its new goal of 45 days? John Plc has an annual sale of €160 million a year. Fifty per- cent of their sales are on credit. The management has decided to maintain an averag collection period of 45 days. a. What is the maximum level of accounts receivable that John Plc can carry and meet their collection period target? b. If John Ple has an average collection period of 60 days, how much does it need to reduce its level of debtors or accounts receivables in order to achieve its new goal of 45 days?
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Answer rating: 100% (QA)
Answer a average collection period average receviables x 360 credit sales 45 average receviables x 3... View the full answer
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