The following ratios are available for Satellite Mechanical: Instructions (a) Calculate the collection period, days sales in

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The following ratios are available for Satellite Mechanical:
The following ratios are available for Satellite Mechanical:
Instructions
(a) Calculate the

Instructions
(a) Calculate the collection period, days sales in inventory, and operating cycle in days for each year.
(b) Has Satellite Mechanical's liquidity improved or weakened over the three-year period? Explain.
(c) Do changes in turnover ratios affect profitability? Explain.
(d) Do changes in turnover ratios affect cash flow? Explain.
TAKING IT FURTHER
At the beginning of 2014, the owner of Satellite Mechanical decided to eliminate sales discounts because she thought it was costing the company too much money. The terms of credit sales were changed from 2/10, n/30 to n/30. Evaluate this decision.

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Accounting Principles Part 2

ISBN: 978-1118306796

6th Canadian edition Volume 1

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow

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