4.10 The Brenmar Company had a gross profit margin(gross profits divided by sales) of 25 percent and
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Question:
4.10
The Brenmar Company had a gross profit margin(gross profits divided by sales) of 25 percent and sales of $9.5 million last year.71 percent of thefirm's sales are oncredit, and the remainder are cash sales. Company's current assets equal $ 1.9 million, its current liabilities equal $295,200, and it has $109,600 in cash plus marketable securities.
a. IfBrenmar's accounts receivable equal $563,400, what is its average collectionperiod?
b. If Brenmar reduces its average collection period to 15 days, what will be its new level of accountsreceivable?
c.Brenmar's inventory turnover ratio is 9.5 times. What is the level ofBrenmar's inventories?
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