The financial statements of Anglo American Platinum Limited (Amplats) are presented in Appendix B following the financial
Question:
The financial statements of Anglo American Platinum Limited (Amplats) are presented in Appendix B following the financial statements for Eastern Platinum Limited (Eastplats) in Appendix A.
Instructions
(a) Calculate the following for each company for its most recent fiscal year. The industry average is shown in parentheses.
1. Current ratio (1:1)
2. Receivables turnover (9.9 times) (Assume all sales were credit sales and use net receivables instead of gross receivables.)
3. Average collection period (37 days)
(b) Given the nature of each company's accounts receivable, what conclusions about each company's liquidity and management of its accounts receivable can be drawn from your calculations in (a)?
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... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118024492
5th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine