Question
(Efficiency analysis) The Brenmar Sales Company had a gross profit margin(gross profits divided by sales) of 33 33 percent and sales of $ 8.7 $8.7
(Efficiency analysis)The Brenmar Sales Company had a gross profit margin(gross profits divided by
sales) of 33
33 percent and sales of $ 8.7
$8.7 million last year.70
70 percent of thefirm's sales are oncredit, and the remainder are cash sales. Brenmar's current assets equal $ 1.8
$1.8 million, its current liabilities equal $ 295,100 and it has $ 103, 200 in cash plus marketable securities.
a. IfBrenmar's accounts receivable equal $ 562,200 what is its average collectionperiod?
b. If Brenmar reduces its average collection period to 25 days, what will be its new level of accountsreceivable?
c.Brenmar's inventory turnover ratio is 9.4 times. What is the level ofBrenmar's inventories?
a.IfBrenmar's accounts receivable equal $562,200, what is its average collectionperiod?
Thecompany's average collection period will be days.(Round to two decimalplaces.)
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