Questions 15 and 16 refer to the following scenario: Great Grains Ltd sells grain feed to farmers. Their total sales figure for the past year was R1.8 million. They sell 65% of their produce on credit. Their total bad debts figure for the year was R128,700.

Question 15

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Question text

What is Great Grains bad debt ratio?

Select one:

a. 20.43%

b. 35%

c. 11%

d. 7.15%

e. 4.65%

Question 16

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Question text

If the average bad debt ratio for the grain feed sales industry is 8%, what does this mean for Great Grains Ltd?

Select one:

a. Their bad debts are worse than average they should tighten their credit standards.

b. Their bad debts are worse than average they should relax their credit standards.

c. Their bad debts are better than average they should tighten their credit standards.

d. Their bad debts are better than average they should relax their credit standards.