A firm has an average collection period of 10 days. The industry average ACP is 25 days.

Question:

A firm has an average collection period of 10 days. The industry average ACP is 25 days. Is this a good or poor sign about the management of the firm’s accounts receivable?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Finance Applications and Theory

ISBN: 978-0077861681

3rd edition

Authors: Marcia Cornett, Troy Adair

See More Books

Question Posted: Sep 23, 2014 10:22 AM

See More Questions

Your firm has an average collection period of 53 days. Current practice is to factor all receivables immediately at a 2.5 percent discount. What is the effective cost of borrowing in this case?...
Your firm has an average collection period of 29 days. Current practice is to factor all receivables immediately at a 1.25 percent discount. What is the effective cost of borrowing in this case?...
Your firm has an average collection period of 32 days. Current practice is to factor all receivables immediately at a discount of 1.35 percent. What is the effective cost of borrowing in this case?...
In Power Bi please:I have a data table in the following format:DateSoccerBasketballBaseball2022 November9856602022 December10154612023 January10457642023 February100506 1 answer
Every time you send a direct-request e-mail message to Ted Jackson, who works in another department in your company, he delays or refuses to comply. You're beginning to get impatient. Should you send...
Evaluate the given trigonometric functions by first changing the radian measure to degree measure. Round off results to four significant digits. sec 4.5920
2 En los primeros 50 aos de operaciones comerciales, Johnson Carpet Company produjo alfombras para uso residencial. La fuerza de ventas estaba estructurada en forma geogrfica. Durante los ltimos...
Dave and Marlene Carter live in the Boston area, where Dave has a successful orthodontics practice. Dave and Marlene have built up a sizable investment portfolio and have always had a major portion...
Required information E8-3 Computing and Recording Cost and Depreciation of Assets (Straight-Line Depreciation) LO8-2, 8-3 [The following information applies to the questions displayed below.) Shahia...
A rectangular plate of length L and width W is insulated on sides x= L and y= W. The plate is heated with variable flux along x= 0. The fourth side is at temperature 7j. Determine the steady state...
Explain the meaning and significance of the following ratios. a. Quick ratio b. Average collection period c. Return on equity d. Days sales in inventory e. Debt ratio f. Profit margin g. Accounts...
A firm has a debt ratio of 20 percent. The industry average debt ratio is 65 percent. Is this a good or poor sign about the management of the firms financial leverage?
Dolores Lopez opened a new consulting business. The following transactions occurred during January of the current year. Classify each transaction as an operating, an investing, or a financing...
Alvarado Company produces a product that requires 5 standard direct labor hours per unit at a standard hourly rate of $12.00 per hour. If 5,700 units used 29,400 hours at an hourly rate of $11.40 per...
7. (30 points) You are a teaching assistant (TA) for a new course in the department and you wish to measure the amount of time that students spend engaging with the online resources. Using the Canvas...
Mod Clothiers makes women's clothes. It costs $28,000 to produce 5,000 pairs of polka-dot polyester pants. They have been unable to sell the pants at their usual price of $50.00. The company is...
In a mid-sized manufacturing company, the annual financial statements were prepared for audit by an external auditing firm. The company\'s finance team had diligently compiled the financial data, and...
Explain the meaning of the SMART acronym. In 100-200 words, define what the words "goal" and "success" mean to you. Summarize your thoughts on whether or not the SMART model can help you become a...
Which performance management system is recognised as one of the most useful for hotels and how can it be used?
The overall reaction and equilibrium constant value for a hydrogenoxygen fuel cell at 298 K is 2H 2 (g) + O 2 (g) 2H 2 O(l) K = 1.28 10 83 a. Calculate E cell and G 8 at 298 K for the fuel cell...
What quality must an insurance contract possess to prevent it from being a wager and therefore void?
Create the spreadsheet below. The spreadsheet should use the returns for assets A and B to form a portfolio return using the weights for each asset shown in cells E1 and E2. The average portfolio...
Following stocks in a portfolio is easier than ever. Many financial Websites have the capability to follow the stocks in your portfolio over time. Just enter your stocks, the number of shares, your...
How should you handle a case where required return computations from CAPM and the constant growth rate model are very different?
Problem Set Time Value of Money 1. In 10 years, what is the value of $100 invested today at an interest rate of 8% per year, compounded annually? 2. In 10 years, what is the value of $100 invested...
The Blending Department of Luongo Company has the following cost and production data for the month of April. Costs: Work in process, April 1 Direct materials: 100% complete $120,000 Conversion costs:...
Q3 plz answer correctly and check work Builtrite's upper management has been comparing their books to industry standards and came up with the following question: Why is our operating profit margin...

A firm has an average collection period of 10 days. The industry average ACP is 25 days.

Question:

Step by Step Answer:

If the ACP is extremely low the firms accounts receivabl...View the full answer

Finance Applications and Theory

Students also viewed these Finance questions