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Please answer and explain Questions 5 and 6 Fresh & Fruity Foods, Inc. Fresh & Fruity Foods is a mail-order company operating out of a
Please answer and explain Questions 5 and 6
Fresh & Fruity Foods, Inc. Fresh & Fruity Foods is a mail-order company operating out of a winery near Santa Rosa Califomia. The company specializes in sending Califomia specialties to catalog customers nationwide. Sales are seasonal, with most occurring in and December when people select Fresh & Fruity's Famous Fruit Fantasy boxes as Christmas gifts. Athough seasonal, the You know. Tom." Alice said as she sliced a piece of avocado, "I was reading the other day about a company called Kringle's Candles & Omaments, and it occurred to me that we're a lot like them. Most of our assets their accounts receivable and inventory; and over half of ours are financed just like theirs, by current because the bulk of Fresh&Fruity customers are regulars who come back year after year. The company has also managed to smooth out its sales somewhat by offering incentives, such as the Fruit of the Month club, that encourage customers to buy there's another way that's a good deal easier The nature of the mail-order business is such that most of Fresh&Fruity's sales are on credit; therefore, the company has historically had a high accounts receivable balance relative to sales. It has also historically been short of cash forcing it to delay payments to suppliers as long as possible (its average time to Oh? What's that?" Tom replied, his interest captured. "All we have to do," she said, "is to reduce our accounts receivable balance. That will help reduce our accounts payable balance -since, as our customers begin paying us earlier, we can pay our suppliers earlier in turn. If we could get enough customers to pay us right away we could even pay some of the suppliers pay accounts in 2010, was 67 days) In January 201, Tom Appleby and Alice Plummer, the president and treasurer of Fresh & Fruity, respectivelyStep by Step Solution
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